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Maxim Corp. has provided the following information about one of its products: Date Transaction Number of...

Maxim Corp. has provided the following information about one of its products:

Date Transaction Number of Units Cost per Unit
1/1 Beginning Inventory 285 $ 157
6/5 Purchase 485 $ 177
11/10 Purchase 185 $ 217

During the year, Maxim sold 570 units.

What is ending inventory using the average cost method? (Do not round intermediate computations.)

$83,845.

$85,845.

$68,830.

$70,830.

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Homework Answers

Answer #1
Date Transaction Number of Units Cost per Unit Total cost
01-Jan Beginning Inventory 285 157        44,745
06-May Purchase 485 177        85,845
11-Oct Purchase 185 217        40,145
Total 955      170,735

Number of units sold = 570

Number of units available for sale = 955

Ending inventory units = Number of units available for sale -Number of units sold

= 955-570

= 385

Weighted Average cost per unit = Total cost / Number of units available for sale

= 170,735/955

= $178.780105

Cost of ending inventory = Ending inventory units x Weighted Average cost per unit

= 385 x 178.780105

= $68,830

Third option is correct option.

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