Question

Skysong, Inc. has the following inventory data: July 1 Beginning inventory 30 units at $19 $570 7 Purchases 105 units at $20 2100 22 Purchases 15 units at $22 330 $3000 A physical count of merchandise inventory on July 30 reveals that there are 50 units on hand. Using the average cost method, the value of ending inventory is

Answer 1

Answer: $1000

Explanation:

Using the average cost method, the value of ending inventory will be calculated thus:

Average cost per unit = Total cost / Total number of units

= $3000/150

= $20 per unit

Value of ending inventory = 50 units × $20 = $1000

Therefore, the value of ending inventory is $1000.