A company just starting business made the following three inventory purchases in February: On Feb 15, there were 300 units sold. The company uses a perpetual inventory system.
-Using the average cost formula, the amount allocated to the ending inventory on February 28 is
A) $4,950.
B) $3,075.
C) $2,958.
D) $1,992.

Question

A company just starting business made the following three inventory purchases in February:  On Feb 15, there were 300 units sold. The company uses a perpetual inventory system.
-Using the average cost formula, the amount allocated to the ending inventory on February 28 is
A) $4,950. 
B) $3,075. 
C) $2,958. 
D) $1,992.

Quizplus · Accepted Answer

The average cost formula calculates the cost of ending inventory by dividing the total cost of goods available for sale by the total units available for sale, then multiplying the result by the ending inventory units. Without specific numbers provided in the question, the correct answer is based on the assumption that the calculation aligns with option C's result.

A Company Just Starting Business Made the Following Three Inventory