Question

Use the following data of Seaspray ​Sales, Inc.:                                   &

Use the following data of Seaspray ​Sales, Inc.:

                                                     Units    Unit Cost                 Total Cost                        Units Sold

Beggining inventory                      20                       $4                            $80

Purchase on Apr 25                      43                       $6                            $258

Purchase on Nov 16                     11                       $10                          $110

Sales                                              55                         ?                               ?

​Seaspray Sales' cost of ending inventory using the average cost method is:

A. $ 115

B. $ 158

C. $ 80

D. $ 550 .

Business   Accounting   
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Homework Answers

Answer #1
Ans. Option A $115
Transactions Units Rate Cost
Beginning inventory 20 4 80
Purchases on apr 25 43 6 258
Purchases on nov 16 11 10 110
Total 74 448
Average cost per unit = Total cost of goods available for sale / Total units available
448 / 74
6.05
Ending inventory units = Total units available - No. of units sold
74 - 55
19
Cost of ending inventory = Ending inventory units * Average cost per unit
19 * 6.05
114.95 or   115 (rounded)
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