Umatilla Tile Company compiled the following inventory information for the current year. Sales for the year were 3,500 units at $25 each. Total operating expenses for the year, excluding cost of goods sold, were $35,000

The company maintains a periodic inventory system.

Date Number of Units Unit Cost Total Cost
January 1 Beginning inventory 1,000 $10.08 $10,080
March 10 Purchase 1,200 $11.00 $13,200
July 22 Purchase 1,500 $12.00 $18,000
November 9 Purchase 1,800 $13.00 $23,400
Totals 5,500 $64,680

Required:
1. Determine the ending inventory cost assuming the company uses the weighted average inventory method.
2. Determine the net income that will be reported on the income statement assuming the company uses the weighted average inventory method.

1. Average unit cost: $11.76 = $64,680/5,500
Ending inventory: $23,520 = $11.76 x 2,000 units
2. Net income:
Sales $87,500 = 3,500 units x $25
COGS 41,160 = 3,500 units x $11.76
Operating expenses 35,000
Net income $11,340