Lambert Center began operations on July 1. It uses a perpetual inventory system.
ID: 2380937 • Letter: L
Question
Lambert Center began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales.
Purchases
Date Units Unit Cost Unit Sales
July 1 9 $81
July 6 0 7
July 11 4 $86
July 14 0 4
July 21 5 $92
July 27 0 4
Calculate the Average Cost for Each Unit (For every Date)
Explanation / Answer
July 1 Beginning 9 units @ $81; $729
Average cost per unit $81.00; ending inventory $729
July 6 Sold 7 units (bal. 2 units)
Average cost per unit $81.00; ending inventory $162
July 11 Purchased 4 units @ $86; $344 (bal. 6 units)
Average cost per unit = ($162 + $344)/6 units = $84.33; ending inventory $506
July 14 Sold 4 units (bal. 2 units)
Average cost per unit $84.33; ending inventory $168.68 (round to $169)
July 21 Purchased 5 units @ $92; $460 (bal. 7 units)
verage cost per unit = ($169 + $460)/7 units = $89.86; ending inventory $628.68 (round to $629)
July 27 Sold 4 units (bal. 3 units)
Average cost per unit $89.86; ending inventory $359.42 (round to $360)
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