Question

Ayayai Corp. has the following inventory data:________. July 1 Beginning inventory 43 units at $20 $860 7 Purchases 126 units at $24 3024 22 Purchases 31 units at $22 682 $4566 A physical count of merchandise inventory on July 30 reveals that there are 49 units on hand. Using the average cost method, the value of ending inventory is:__________.

Answer 1

Answer:

the ending inventory is $1,118.67

Explanation:

The computation of the ending inventory using the average cost method is shown below:

But before that first determined the average cost per unit which is

= Total cost ÷ total number of units

= $4,566 ÷ (43 units + 126 units + 31 units)

= $22.83 per unit

Now there is the ending inventory units i.e. 49 units

So, the ending inventory is

= $22.83 × 49 units

= $1,118.67

Hence, the ending inventory is $1,118.67