Purchases and sales during a recent period for Casora Inc. were as follows:

- Refer to Exhibit 7-4. Beginning inventory was 100 units at $1 each. Given this information, what is the average cost per unit available for sale during the year if the periodic inventory method is used (rounded to the nearest cent)?

Question

Purchases and sales during a recent period for Casora Inc. were as follows:

- Refer to Exhibit 7-4. Beginning inventory was 100 units at $1 each. Given this information, what is the average cost per unit available for sale during the year if the periodic inventory method is used (rounded to the nearest cent)?

Quizplus · Accepted Answer

Using the periodic inventory method, the cost of goods sold is calculated as follows:
Beginning inventory (100 units x $1 per unit) = $100
Add: Purchases (200 units x $2 per unit) = $400
Cost of goods available for sale = $500
Less: Ending inventory (50 units x $3 per unit) = $150
Cost of goods sold = $350
Therefore, the average cost per unit available for sale during the year is ($500 / 150 units) = $3.33, rounded to the nearest cent, which is answer choice D.

Purchases and Sales During a Recent Period for Casora Inc