Ask Question
26 December, 13:23

The following lots of a particular commodity were available for sale during the year:

Beginning inventory 10 units at $52

First purchase 16 units at $54

Second purchase 26 units at $24

Third purchase 18 units at $60

The firm uses the periodic system, and there are 22 units of the commodity on hand at the end of the year.

What is the ending inventory balance at the end of the year rounded to nearest dollar according to the average cost method? Do not round intermediate calculations.

a. $1,168

b. $1,176

c. $1,144

d. $971

+2
Answers (1)
  1. 26 December, 13:50
    0
    d. $971

    Explanation:

    Periodic Inventory

    Average Cost Method

    10 units x $52 = $520

    16 units x $54 = $864

    26 units x $24 = $624

    18 units x $60 = $1,080

    Total Units = 10 units + 16 units + 26 units + 18 units

    Total units = 70 units

    Total Cost = $520 + $864 + $624 + $1,080

    Total Cost = $3,088

    Average Cost = Total Cost / Total Units

    Average Cost = $3,088 / 70 units

    Average Cost = $44.1 per unit

    Ending Inventory Balance:

    22 units x $44.1 per unit = $971
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at $52 First purchase 16 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers