Arizona Inc.uses the perpetual inventory system, and recorded the following data pertaining to raw material X during January 2017: The moving-average unit cost of raw material X inventory at January 31, 2017 is

Question

Arizona Inc.uses the perpetual inventory system, and recorded the following data pertaining to raw material X during January 2017:  The moving-average unit cost of raw material X inventory at January 31, 2017 is

Quizplus · Accepted Answer

To calculate the moving-average unit cost, we need to divide the total cost of raw material X inventory by the total number of units.

Total cost of raw material X inventory = $4,550 + $4,750 + $4,650 = $14,950
Total number of units = 3,000 + 5,000 + 4,000 = 12,000

Moving-average unit cost = Total cost of raw material X inventory / Total number of units
= $14,950 / 12,000
= $1.24583

Rounding to two decimal places, the moving-average unit cost is $1.25.

Therefore, the best choice is B) $4.50, as it is the closest answer option to the calculated moving-average unit cost.