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26 October, 02:42

Maxim Corp. has provided the following information about one of its products: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 220 $ 144 6/5 Purchase 420 $ 164 11/10 Purchase 120 $ 204 During the year, Maxim sold 440 units. What is ending inventory using the average cost method? (Do

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  1. 26 October, 03:01
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    52,650 approx

    Explanation:

    The calculation of ending inventory using average cost method is shown below:-

    Total Units = 220 + 420 + 120

    = 760

    Total cost = (220 * $144) + (420 * $164) + (120 * $204)

    = $31,680 + $68,880 + $24,480

    = $125,040

    Average cost per unit = $125,040 : 760

    = 164.53

    Ending inventory = Total units - units sold

    = 760 - 440

    = 320

    Cost of ending inventory = Ending inventory * Average cost per unit

    = 320 * 164.53

    = 52,650 approx
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