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ABC Company uses a periodic inventory system. Relevant inventory information for the year is: January 1...

ABC Company uses a periodic inventory system. Relevant inventory information for the year is: January 1 Beginning inventory 20 units @ $170 per unit May 23 Purchase 20 units @ $125 per unit November 5 Purchase 400 units @ $160 per unit November 18 Purchase 100 units @ $175 per unit At year-end, 50 units remain in inventory. What is the cost of the ending inventory on an Average Cost basis? Round average cost per unit to the nearest cent.  

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Answer #1
Date Particulars Units Cost per unit Total cost
January 1 Beginning inventory 20 170 3400
May 23 Purchase 20 125 2500
November 5 Purchase 400 160 64000
November 18 Purchase 100 175 17500
Goods available for sale 540 87400
Average cost per unit = Cost of goods available for sale / Units available for sale = 87400 / 540 161.85
Cost of ending inventory = Ending inventory units * Average cost per unit = 50 * 161.85 8092.50
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