ACCA FA2 INVENTORY VALUE 2
At 1 January 20X3 Wasan had 500 units of a particular item in inventory. These were valued at $600 per unit. During January, the purchase and sales of the item were:
| Date | Units | Price per unit | Sales (units) |
| 5 Jan | 250 | ||
| 10 Jan | 500 | 540 | |
| 17 Jan | 900 | ||
| 22 Jan | 700 | 486 | |
| 28 Jan | 100 |
Wasan values inventory on the periodic weighted average basis.
What is the value of Wasan's inventory at 31 January 20X3 (to the nearest $1)?
Suggested Solution.
No of units available for sales
= 500 + 500 +700
=1700
No of units sold during the month
=250 +900 +100
=1250
No of units at the end of the month
= 1700 -1250
=450 Units
Periodic weighted average rate computation
| Date | Units | Price per unit | Value |
| 1 Jan | 500 | 600 | 300,000 |
| 10 Jan | 500 | 540 | 270,000 |
| 22 Jan | 700 | 486 | 340,200 |
| Total | 1,700 | 910,200 | |
| Unit price | 535 | ||
| Month end Unit | 450 | ||
| Inventory Value | 240,935 |
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