Motor Cross Ltd's Inventory Purchases for the Month of January

question 47

Multiple Choice

Motor Cross Ltd's inventory purchases for the month of January are summarised below.Using the weighted-average method of valuing inventory,the weighted unit cost is:
$\begin{array}{lcc}\text{Purchase date}&\text{ Number of units}&\text{ Cost per unit}\\\\\text { 2. January } & 8 & \$ 5000 \\ \text { 13 January } & 12 & \$ 8500 \\ \text { 17 January } & 35 & \$ 7000 \\ \text { 27 January } & 20 & \$ 10500\end{array}$

• A) $10 500
• B) $ 7 960
• C) $ 7 750
• D) $ 8 500

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Definitions:

Periodic Inventory System

An inventory accounting system that updates inventory levels and cost of goods sold at the end of an accounting period, rather than after each sale or purchase.

FIFO

"First In, First Out," an inventory valuation method where goods first received are the first to be sold or used, assuming costs rise over time.

FIFO

"First In, First Out," an inventory valuation method where the first items purchased or produced are the first to be sold, affecting the cost of goods sold and inventory valuation.