Question

Alpha company bought 75 units of inventory for $4 each and 25 units of inventory for $5 each. alpha's weighted average cost per unit is ______.
a) $4
b) $5
c) $4.25
d) $4.50

Answer 1

The correct answer is c) $4.25.

$\frac{(75*4)+(25*5)}{75+25}$= 4.25

Inventory

The term "inventory" refers to both the raw materials utilized in production and the finished products that are offered for sale. Because the turnover of an organization's inventory is one of the main sources of revenue generation and, consequently, profitability for the firm's shareholders, it is one of the most significant assets a company has. Finished commodities, work-in-progress, and raw materials are the three different categories of inventory. A company's balance sheet classifies it as a current asset. Any company's inventory is a crucial asset. It is described as the assortment of raw materials or completed products kept on hand by a corporation for the regular conduct of business.

Alpha company bought 75 units of inventory for $4 each and 25 units of inventory for $5 each. alpha's weighted average cost per unit is ______.

a) $4

b) $5

c) $4.25

d) $4.50

Learn more about inventory here:

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