Calculate the cost of goods sold and ending inventory using weighted average. (Round the weighted average cost per unit to 2 decimal places, e.g. 5.27 and final answers to 0 decimal places, e.g. 5,275.)

Weighted Average

Cost of goods sold

Ending inventory

To calculate the Cost of Goods Sold (COGS) and Ending Inventory using the weighted average cost method, we need to determine the average cost per unit after each purchase. This method requires us to recalculate the average cost per unit after each inventory purchase. 

### Beginning Inventory (May 1)
- 430 units @ $4.00 each = $1,720

### Purchases
1. **May 4:** 1,500 units @ $4.20 each = $6,300
2. **May 14:** 780 units @ $4.30 each = $3,354
3. **May 29:** 400 units @ $4.75 each = $1,900

### Sales
1. **May 3:** 260 units @ $7.00 each
2. **May 16:** 1,100 units @ $7.00 each
3. **May 18:** 570 units @ $7.50 each

### Step-by-Step Calculation of Weighted Average

#### After May 1 Inventory
- Total units: 430
- Total cost: $1,720
- Average cost per unit: $1,720 / 430 = $4.00

#### After May 4 Purchase
- New total units: 430 + 1,500 = 1,930
- New total cost: $1,720 + $6,300 = $8,020
- New average cost per unit: $8,020 / 1,930 = $4.15 (rounded to 2 decimal places)

#### May 3 Sale
- Units sold: 260
- COGS: 260 units * $4.00 = $1,040 (using previous average cost)
- Remaining units: 1,930 - 260 = 1,670
- Remaining cost: $8,020 - $1,040 = $6,980

#### After May 14 Purchase
- New total units: 1,670 + 780 = 2,450
- New total cost: $6,980 + $3,354 = $10,334
- New average cost per unit: $10,334 / 2,450 = $4.22 (rounded to 2 decimal places)

#### May 16 Sale
- Units sold: 1,100
- COGS: 1,100 units * $4.22 = $4,642 (rounded to 0 decimal places)
- Remaining units: 2,450 - 1,100 = 1,350
- Remaining cost: $10,334 - $4,642 = $5,692

#### After May 29 Purchase
- New total units: 1,350 + 400 = 1,750
- New total cost: $5,692 + $1,900 = $7,592
- New average cost per unit: $7,592 / 1,750 = $4.34 (rounded to 2 decimal places)

#### May 18 Sale
- Units sold: 570
- COGS: 570 units * $4.34 = $2,474 (rounded to 0 decimal places)
- Remaining units: 1,750 - 570 = 1,180
- Remaining cost: $7,592 - $2,474 = $5,118

### Summary

- **Cost of Goods Sold (COGS):**
  - May 3: $1,040
  - May 16: $4,642
  - May 18: $2,474
  - **Total COGS:** $1,040 + $4,642 + $2,474 = $8,156

- **Ending Inventory:**
  - Total units remaining: 1,180
  - Total cost remaining: $5,118

Thus,
- **Cost of Goods Sold (COGS):** $8,156
- **Ending Inventory:** $5,118

Would you like more details or have any questions about this solution?

Here are some more questions you might want to explore:
1. How does the weighted average method compare with FIFO and LIFO in terms of impact on financial statements?
2. What are the advantages and disadvantages of using the weighted average cost method?
3. How do you handle inventory in a perpetual vs. periodic inventory system?
4. Can you explain how inflation affects the choice of inventory valuation methods?
5. What are some real-world applications of different inventory valuation methods?

**Tip:** Using inventory management software can help streamline the calculation of inventory costs and improve accuracy in financial reporting.

Learn how to calculate the Cost of Goods Sold (COGS) and Ending Inventory using the weighted average cost method. Follow a detailed example with step-by-step calculations rounded to the nearest decimal place. Suitable for financial analysis and accounting students.

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