Question

The following units of an inventory item were available for sale during the year. Use this information to answer the following questions. Beginning inventory 10 units at $55 First purchase 25 units at $60 Second purchase 30 units at $65 Third purchase 15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. ​ The value of ending inventory rounded to nearest dollar using average cost is:

Answer 1

Answer:

Cost of inventory= $1,250

Explanation:

Giving the following information:

Beginning inventory 10 units at $55

First purchase 25 units at $60

Second purchase 30 units at $65

Third purchase 15 units at $70

The firm uses the periodic inventory system.

During the year, 60 units of the item were sold.

Units in inventory= 80 units - 60 units= 20 units

Average cost= (55 + 60 + 65 + 70)/4= $62.5

Cost of inventory= 20*62.5= $1,250