Orange-Aide Company has the following inventory data: $$\begin{array} { r l r r }
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & 440\&&&\$4,180
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 50 units on hand.Using the average cost method the value of ending inventory is
A)$1070
B)$1045 c $1050
D $1100

Question

Orange-Aide Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & 440\&&&\$4,180
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 50 units on hand.Using the average cost method the value of ending inventory is
A)$1070
B)$1045 c $1050
D $1100

Quizplus · Accepted Answer

The average cost per unit is calculated as total cost divided by total units: $4,180 / 200 = $20.90. The ending inventory value is 50 units * $20.90 = $1,045.

Orange-Aide Company Has the Following Inventory Data A Physical Count of Merchandise Inventory on July 31 Reveals