At May 1, 2014, Deitrich Company had beginning inventory consisting of 200 units with a unit cost of €3.50. During May, the company purchased inventory as follows: 400 units at €3.50
600 units at €4.00
The company sold 1,000 units during the month for €6 per unit. Deitrich uses the average-cost method. The average cost per unit for May is

Question

Quizplus · Accepted Answer

The average cost per unit is calculated by dividing the total cost of goods available for sale by the total units available for sale. Total cost = (200 units * €3.50) + (400 units * €3.50) + (600 units * €4.00) = €3,800. Total units = 200 + 400 + 600 = 1,200. Average cost per unit = €3,800 / 1,200 = €3.75.

At May 1, 2014, Deitrich Company Had Beginning Inventory Consisting