Exercise 9.3 ★ DETERMINING INVENTORY COST AND COST OF SALES (PERIODIC) Select the correct answer. Show any workings required and provide reasons to justify your choice. 1. The cost of inventory on hand at 1 January 2013 was $25 000 and at 31 December 2013 was $35 000. Inventory purchases for the year amounted to $160 000, freight outwards expense was $500, and purchase returns were $1400. What was the cost of sales for the year ended 31 December 2013?

(a) $148 100

(c) $149 100

(b) $148 600

(d) $150 000 The following inventory information relates to K Rauma, who uses a periodic inventory system and rounds the average unit cost to the nearest dollar: Beginning inventory 10 units @ average cost of $25 each = $250 January purchase 10 units @ $24 each July purchase 39 units @ $26 each October purchase 20 units @ $24 each Ending inventory 25 units What is the cost of ending inventory using the weighted average costing method?

(a) $625

(c) $618.75

(b) $620

(d) $610