Consider the following facts: - Company A begin business operations in the month
ID: 2501735 • Letter: C
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:
$668
$536
None of these answers are correct
$736
$1,511
Explanation / Answer
Calculation of Value of ending Inventory:
Date
Purchased Units
Cost
April. 1
150
$ 390
April. 10
200
$ 585
April. 15
200
$ 630
April. 28
150
$ 510
Total
700
$ 2,115
Average Cost per unit = 2115 / 700
$ 3.02
Units in ending inventory
200
Value of ending inventory = 200*3.02
$ 604.29
Calculation of Value of ending Inventory:
Date
Purchased Units
Cost
April. 1
150
$ 390
April. 10
200
$ 585
April. 15
200
$ 630
April. 28
150
$ 510
Total
700
$ 2,115
Average Cost per unit = 2115 / 700
$ 3.02
Units in ending inventory
200
Value of ending inventory = 200*3.02
$ 604.29
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.