A company purchased 100 units for $20 each on 31 January. It purchased 100 units for $30 on 28 February. It sold 150 units for $45 each from 1 March through to 31 December. If the company uses the average- cost inventory costing method, what is the amount of ending inventory on 31 December?

Question

Quizplus · Accepted Answer

The average cost per unit is calculated as [(100 units * $20) + (100 units * $30)] / 200 units = $25. The ending inventory is 50 units (200 purchased - 150 sold) at $25 each, totaling $1,250.

A Company Purchased 100 Units for $20 Each on 31