Pasquale has the following inventory information. $\begin{array}{rrrr}\text { July } 1&\text { Beginning Inventory }&20 \text { units at } \$ 19&\$380\
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 24 & 240\&&&\$2,020
\end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using a periodic inventory system and the average-cost method, the cost of ending inventory is

Question

Quizplus · Accepted Answer

We do not have information about the cost of goods sold or the purchases made during the period. Therefore, we cannot calculate the exact cost of ending inventory. However, we can use the information given in the question to make an approximation. 
According to the question, there were 30 units on hand at the end of the period. Let's assume that all these units came from the same batch. The total cost of this batch would be the sum of the cost of goods available for sale divided by the number of units available for sale. 
The cost of goods available for sale would include the cost of beginning inventory and any purchases made during the period. However, since we don't have this information, we'll assume that Pasquale started with 0 units and only made a purchase of 30 units during the period. 
The cost of the 30 units is not given, but we do have the following information: 
11eb8bbc_6184_3a50_8dc2_df2e7dc840d9_TB8265_00

This appears to be a product code or SKU (stock keeping unit), but we cannot use it to determine the cost of the merchandise.

Therefore, let's assume that the cost of the 30 units was the average cost of all units available for sale. We can calculate this average cost as follows:

Average cost per unit = Cost of goods available for sale / Number of units available for sale

Since we assume that Pasquale started with 0 units and only purchased 30 units, the number of units available for sale is 30.

To find the cost of goods available for sale, we need to know the cost per unit of the merchandise. Unfortunately, this information is not given in the question. We can make an educated guess based on the answer choices.

If we assume that the cost per unit is $20, then the cost of the 30 units would be $600 (30 x $20). Using this cost and the assumption of 30 units purchased, we can calculate the average cost per unit as follows:

Average cost per unit = $600 / 30 = $20

Therefore, the cost of ending inventory would be:

Cost of ending inventory = Ending inventory (units) x Average cost per unit 
Cost of ending inventory = 30 x $20 = $600

However, none of the answer choices match $600. The closest answer choice is $606 (B), which is only $6 more than our calculated value.

Therefore, the best choice is B, $606.

Pasquale Has the Following Inventory Information A Physical Count of Merchandise Inventory on July 31 Reveals