A company just starting business made the following four inventory purchases in June: $\begin{array}{lll}\text { June } 1 &150 \text { units } & \$390\
\text { June } 10 & 200 \text { units } & 598 \
\text { June } 15 & 200 \text { units } & 630 \
\text { June } 28 & 150 \text { units } & 510 \
&&\$2,128
\end{array}$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using a periodic inventory system and the average-cost method, the amount allocated to the ending inventory on June 30 is

Question

Quizplus · Accepted Answer

To find the amount allocated to the ending inventory using the average-cost method, we need to calculate the weighted average cost per unit.

Total cost of inventory purchased in June: 
$180 + $270 + $360 + $540 = $1350

Total units purchased in June: 
50 + 70 + 90 + 110 = 320

Weighted average cost per unit: 
$1350 ÷ 320 = $4.21875

Ending inventory amount: 
200 units x $4.21875 = $843.75

Therefore, the amount allocated to the ending inventory on June 30 is $608, option B.

A Company Just Starting Business Made the Following Four Inventory