At May 1, 2018, 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

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 * $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, 2018, Kibbee Company Had Beginning Inventory Consisting