A company just starting business made the following four inventory purchases in June:
A physical count of inventory on June 30 reveals that there are 250 units on hand.
-Using the average cost method, the amount allocated to the ending inventory on June 30 is:
A) $4,200.
B) $2,700.
C) $1,150.
D) $1,500.

Question

A company just starting business made the following four inventory purchases in June:
  A physical count of inventory on June 30 reveals that there are 250 units on hand.
-Using the average cost method, the amount allocated to the ending inventory on June 30 is:
A) $4,200. 
B) $2,700. 
C) $1,150. 
D) $1,500.

Quizplus · Accepted Answer

$4,200/700 units = $6.00 per unit. 250 x $6.00 = $1,500.

A Company Just Starting Business Made the Following Four Inventory