Question

Blue Spruce Corp. Has the following inventory data: July 1 Beginning inventory 126 units at $19 $2394 7 Purchases 441 units at $20 8820 22 Purchases 63 units at $22 1386 $12600 A physical count of merchandise inventory on July 30 reveals that there are 210 units on hand. Using the average cost method, the value of ending inventory is $4074. $4,326. $4,269. $4,200

Answer 1

The value of ending inventory using the average cost method is $4,200.

What is the ending inventory?

In order to determine the ending inventory using the average cost method, the total cost of inventory would be divided by the total inventory bought. The average price would be multiplied by the ending inventory.

Average cost = $12,600 / (126 + 441 + 63) = $20

Ending inventory = $20 x 210 = $4,200

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