ACCA FA2 INVENTORY VALUE 2
At 1 January 20X3 Wasan had 500 units of a particular item in inventory. These were valued at $800 per unit. During January, the purchase and sales of the item were:
| Date | Units | Price per unit | Sales (units) |
| 5 Jan | 250 | ||
| 10 Jan | 800 | 720 | |
| 17 Jan | 300 | ||
| 22 Jan | 800 | 648 | |
| 28 Jan | 600 |
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 + 800 +800
=2100
No of units sold during the month
=250 +300 +600
=1150
No of units at the end of the month
= 2100 -1150
=950 Units
Periodic weighted average rate computation
| Date | Units | Price per unit | Value |
| 1 Jan | 500 | 800 | 400,000 |
| 10 Jan | 800 | 720 | 576,000 |
| 22 Jan | 800 | 648 | 518,400 |
| Total | 2,100 | 1,494,400 | |
| Unit price | 712 | ||
| Month end Unit | 950 | ||
| Inventory Value | 676,038 |
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