[The following information applies to the questions displayed below.]Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $20 each.Purchases on December 710 units @ $ 6 costPurchases on December 1420 units @ $12 costPurchases on December 2115 units @ $14 costDetermine the costs assigned to ending inventory when costs are assigned based on the weighted average method.Note: Round your per unit costs to 2 decimal places.

To determine the costs assigned to ending inventory using the **weighted average method** under a perpetual inventory system, we'll calculate the average cost per unit after each purchase and sale, then apply that cost to the remaining inventory. Here's how the process works:

### Step-by-Step Calculation:

1. **December 7 Purchase:**
   - Purchased 10 units at $6 each.
   - Total cost of inventory = $ 10 \times 6 = 60 $
   - Number of units = 10
   - **Average cost per unit** = $ \frac{60}{10} = 6.00 $

2. **December 14 Purchase:**
   - Purchased 20 units at $12 each.
   - Total cost of purchase = $ 20 \times 12 = 240 $
   - Total cost of inventory before sale = $ 60 + 240 = 300 $
   - Number of units before sale = $ 10 + 20 = 30 $
   - **Average cost per unit** after this purchase = $ \frac{300}{30} = 10.00 $

3. **December 15 Sale:**
   - Sold 15 units at $20 each.
   - Apply the current average cost of $10.00 per unit.
   - Cost of goods sold (COGS) = $ 15 \times 10.00 = 150 $
   - Remaining units = $ 30 - 15 = 15 $
   - Remaining inventory cost = $ 300 - 150 = 150 $
   - **Average cost per unit** remains $10.00 (since no new purchases were made).

4. **December 21 Purchase:**
   - Purchased 15 units at $14 each.
   - Total cost of purchase = $ 15 \times 14 = 210 $
   - Total cost of inventory = $ 150 + 210 = 360 $
   - Total number of units = $ 15 + 15 = 30 $
   - **Average cost per unit** after this purchase = $ \frac{360}{30} = 12.00 $

### Final Calculation:
At the end of December, there are 30 units in inventory, and the weighted average cost per unit is $12.00. 

- **Ending Inventory** = $ 30 \times 12.00 = 360 $

### Conclusion:
The cost assigned to ending inventory is **$360**.

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Would you like further details on this method or any of the steps?

Here are 5 related questions to expand on this topic:

1. How would the calculation change under the First-In, First-Out (FIFO) method?
2. What is the difference between periodic and perpetual inventory systems?
3. How would the ending inventory be calculated using the Last-In, First-Out (LIFO) method?
4. How is the weighted average method different from the specific identification method?
5. How do sales affect inventory under the perpetual system compared to the periodic system?

**Tip:** Always round your per-unit costs carefully in weighted average calculations to maintain accuracy across all transactions.

Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Monson uses a perpetual inventory system. Also, on December 15, Monson sells 15 units for $20 each. Purchases on December 7: 10 units @ $6 cost; Purchases on December 14: 20 units @ $12 cost; Purchases on December 21: 15 units @ $14 cost. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. Note: Round your per unit costs to 2 decimal places.

Learn how to calculate ending inventory costs using the weighted average method in a perpetual inventory system. This example involves Trey Monson's merchandising business and multiple purchases with varying costs, applying key formulas such as the average cost per unit and cost of goods sold (COGS). Ideal for accounting students.

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