Use the information below to answer the following questions. The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at $60 First purchase 25 units at $65 Second purchase 30 units at $68 Third purchase 15 units at $75 The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year rounded to the nearest dollar using the average cost method?

Question

Sariah Giles

Business

24 February, 14:39

Use the information below to answer the following questions. The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at $60 First purchase 25 units at $65 Second purchase 30 units at $68 Third purchase 15 units at $75 The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year rounded to the nearest dollar using the average cost method?

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Answers (1)

Know the Answer?

Johnathan Lyons · Answer 1

The answer is $1684,38

Explanation:

The result is obtained by having a track of average cost after each new inventory purchase. Before computing the new purchase, the total inventory value is summed with the total new purchase and divided by the total new stock (available stock before the purchase + the purchase). As a result, the unit cost per piece is registered. When a sale is made, the inventory is reduced in the amount of pieces and total value, following the last average cost value registered