A company has a beginning inventory of $60,000 and purchases during the year of $160,000. The beginning inventory consisted of 2000 units and 8000 units were purchased during the year. 4080 units remain in ending inventory. The cost of the ending inventory using the average-cost method will be: (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The average cost per unit is calculated by dividing the total cost of goods available for sale ($60,000 + $160,000 = $220,000) by the total units available for sale (2000 + 8000 = 10,000 units), which gives $22 per unit. The ending inventory of 4080 units is then valued at $22 per unit, resulting in an ending inventory cost of $89,760 (4080 units * $22).

A Company Has a Beginning Inventory of $60,000 and Purchases