Consider the following facts: - Company A begin business operations in the month

Question

Consider the following facts: - Company A begin business operations in the month of April. - On April 1, it purchased 150 units of goods for $390. - On April 10, it purchased 200 units of goods for $585. - On April 15, it purchased 200 units of goods for $630. - On April 28, it purchased 150 units of goods for $510. - At the end of the month, it discovered that it had 200 units on hand after completing its physical inventory count. - Company A uses the average-cost inventory accounting method. Company A's ending inventory for April is:

Explanation / Answer

Purchase unit purchase amount

April 1 =150 units for $390

April 10 =200 units for $585

April 15 =200 units for $630

April 28 =150 units for $510

Total = 700 units

Average cost per unit = total cost/ total unit

= 2115 / 700 = 3

Company A's ending inventory for April is 200*3 = $600

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