Ask Question
18 November, 07:03

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?

+2
Answers (1)
  1. 18 November, 07:21
    0
    The answer is: the amount of inventory at the end of the year was $1,583 using the average cost method.

    Explanation:

    The average cost method calculates the cost of inventory by dividing the total costs of goods by the total units.

    10 units x $60 = $600 25 units x $65 = $1,300 30 units x $68 = $2,040 15 units x $75 = $1,125

    The total cost of inventory is $5,065 ($600 + $1,300 + $2,040 + $1,125)

    The total units in inventory are 80 (10 + 25 + 30 + 15)

    To find the average cost per unit = $5,065 / 80 units = $63.31

    If 25 units were left at the end of the year, then the total cost of inventory is $63.31 x 25 = $1,582,81 or $1,583
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 $60 First purchase 25 ...” 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