Company uses the periodic inventory system. For February 2011 , the beginning inventory consisted of 100 units that cost CHF65 each. During the month, the company made two purchases: 400 units at CHF68 each and 150 units at $ \$ 72 $ each. Nolvo sold 500 units during the month of February at CHF 110 per unit. Using the average cost method, what is the amount of ending inventory at February 28, 2011?

Question

Quizplus · Accepted Answer

The average cost per unit is calculated as the total cost of goods available for sale divided by the total units available for sale. Total cost = (100 units * CHF65) + (400 units * CHF68) + (150 units * CHF72) = CHF6,500 + CHF27,200 + CHF10,800 = CHF44,500. Total units = 100 + 400 + 150 = 650 units. Average cost per unit = CHF44,500 / 650 = CHF68.46. Ending inventory = (650 units - 500 units sold) * CHF68.46 = 150 units * CHF68.46 = CHF10,269.

Company Uses the Periodic Inventory System $72 \$ 72 $72 Each Nolvo Sold 500 Units During the Month of February

Company Uses the Periodic Inventory System $\$ 72$ Each Nolvo Sold 500 Units During the Month of February