ACCA FA2 INVENTORY VALUE 2
At 1 January 20X3 Wasan had 400 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 | 200 | ||
| 10 Jan | 700 | 720 | |
| 17 Jan | 100 | ||
| 22 Jan | 500 | 648 | |
| 28 Jan | 500 |
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
= 400 + 700 +500
=1600
No of units sold during the month
=200 +100 +500
=800
No of units at the end of the month
= 1600 -800
=800 Units
Periodic weighted average rate computation
| Date | Units | Price per unit | Value |
| 1 Jan | 400 | 800 | 320,000 |
| 10 Jan | 700 | 720 | 504,000 |
| 22 Jan | 500 | 648 | 324,000 |
| Total | 1,600 | 1,148,000 | |
| Unit price | 718 | ||
| Month end Unit | 800 | ||
| Inventory Value | 574,000 |
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