At May 1, 2015, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows:
800 units at $7
600 units at $8
The company sold 1,000 units during the month for $12 per unit. Kibbee uses the average cost method. The average cost per unit for May is

Question

At May 1, 2015, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows: 
800 units at $7
600 units at $8
The company sold 1,000 units during the month for $12 per unit. Kibbee uses the average cost method. The average cost per unit for May is

Quizplus · Accepted Answer

The average cost per unit is calculated by dividing the total cost of inventory available by the total units available. Total cost = (200 units * $7) + (800 units * $7) + (600 units * $8) = $1,400 + $5,600 + $4,800 = $11,800. Total units = 200 + 800 + 600 = 1,600. Average cost per unit = $11,800 / 1,600 = $7.375.

At May 1, 2015, Kibbee Company Had Beginning Inventory Consisting