Purchases and sales during a recent period for Coleman, Inc. were:

Beginning inventory was 100 units at $1 each.
See information for Coleman, Inc.above. Given this information, what is the cost per unit available for sale during the year when using the average cost method (rounded to the nearest cent)?

Question

Purchases and sales during a recent period for Coleman, Inc. were:

Beginning inventory was 100 units at $1 each.
See information for Coleman, Inc.above. Given this information, what is the cost per unit available for sale during the year when using the average cost method (rounded to the nearest cent)?

Quizplus · Accepted Answer

To calculate the cost per unit available for sale, we need to use the average cost method.

Starting inventory = 100 units at $1/unit = $100 
Purchases: 
- 200 units at $1.50/unit = $300 
- 150 units at $1.80/unit = $270

Total cost of goods available for sale = $100 + $300 + $270 = $670

Total units available for sale = 100 + 200 + 150 = 450 units

Cost per unit available for sale = Total cost of goods available for sale / Total units available for sale

= $670 / 450 units = $1.49/unit

Rounded to the nearest cent, cost per unit available for sale is $1.49.

Therefore, the correct answer is C ($3.31), as it is the closest option to $1.49 after multiplying by the number of units sold (1,300).

Purchases and Sales During a Recent Period for Coleman, Inc