Question

Ace Systems, Inc. uses a perpetual inventory system. The company’s beginning inventory of a particular product and its purchases during the month of January were as follows: Quantity Unit Cost Total Cost Beginning inventory (Jan. 1)..................... 10 $27.50 $275 Purchase (Jan. 15)...................................... 15 $28.00 $420 Purchase (Jan. 23)...................................... _5 $29.00 $145 Total...................................................... 30 $840 On January 28, Ace Systems sells 18 units of this product for the unit price $32. The other 12 units remain in inventory at January 31. Assuming that Ace Systems uses the average cost flow assumption, the cost of ending inventory is:

$336

$499

$504

$576

Answer 1