Stephens Inc. is a wholesaler of photography equipment. The activity for the VTC cameras during July is shown below:

See information for Stephens Inc. above. If Stephens Inc. uses the average cost method to account for inventory, the ending inventory of VTC cameras at July 31 is reported as

Question

Stephens Inc. is a wholesaler of photography equipment. The activity for the VTC cameras during July is shown below:

See information for Stephens Inc. above. If Stephens Inc. uses the average cost method to account for inventory, the ending inventory of VTC cameras at July 31 is reported as

Quizplus · Accepted Answer

Using the average cost method, we need to calculate the weighted average cost per unit:
Total cost of units available for sale: (3,000 x $40) + (2,000 x $43) = $160,000
Total units available for sale: 5,000
Weighted average cost per unit: $160,000 / 5,000 = $32
Ending inventory (units): 1,956
Ending inventory value: 1,956 x $32 = $62,592
Therefore, the ending inventory of VTC cameras at July 31 is reported as $156,912.