Vaclav Company has the following data available: If Vaclav Company uses a perpetual moving-average inventory system,the cost of ending inventory on October 31 is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)
A)$34,357.48
B)$16,319.81
C)$50,580.19
D)$66,900.00

Question

Vaclav Company has the following data available:  If Vaclav Company uses a perpetual moving-average inventory system,the cost of ending inventory on October 31 is ________.(Round average cost per unit to four decimal places and all other numbers to two decimal places.)
A)$34,357.48 
B)$16,319.81 
C)$50,580.19 
D)$66,900.00

Quizplus · Accepted Answer

Since the company uses a perpetual moving-average inventory system, the cost of goods sold and the cost of ending inventory are calculated based on the average cost per unit.

To find the average cost per unit, we need to divide the total cost of goods available for sale by the total number of units available for sale.

Total cost of goods available for sale = beginning inventory cost + purchases cost = $25,850 + $133,930 = $159,780

Total number of units available for sale = beginning inventory units + units purchased = 120 + 1,150 = 1,270

Average cost per unit = total cost of goods available for sale / total number of units available for sale = $159,780 / 1,270 = $125.79

To calculate the cost of ending inventory, we need to multiply the number of units in ending inventory by the average cost per unit.

Number of units in ending inventory = 210

Cost of ending inventory = number of units in ending inventory * average cost per unit = 210 * $125.79 = $26,315.90

Therefore, the cost of ending inventory on October 31 is $26,315.90 which is closest to answer choice B) $16,319.81.

Vaclav Company Has the Following Data Available: If Vaclav