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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 ______.Multiple choice question.$4.25$5$4$4.50

Question

Alpha Company bought 75 units of inventory for 4eachand25unitsofinventoryfor4 each and 25 units of inventory for 5 each. Alpha's weighted average cost per unit is ______.Multiple choice question.4.254.255444.50

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Solution

To calculate the weighted average cost per unit, you need to follow these steps:

  1. Multiply the number of units bought at each price by the price per unit. For the 75 units at 4each,thiswouldbe75∗4 each, this would be 75 * 4 = 300.Forthe25unitsat300. For the 25 units at 5 each, this would be 25 * 5=5 = 125.

  2. Add these two amounts together to get the total cost of the inventory. 300+300 + 125 = $425.

  3. Divide this total cost by the total number of units bought to get the weighted average cost per unit. The total number of units bought is 75 + 25 = 100 units. So, 425/100units=425 / 100 units = 4.25 per unit.

So, the weighted average cost per unit is $4.25.

This problem has been solved

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