Question

A company just began business and made the following four inventory purchases in June: June 1 162 units $1070 June 10 216 units 1452 June 15 216 units 1480 June 28 162 units 1146 $5148 A physical count of merchandise inventory on June 30 reveals that there are 220 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is

Answer 1

Ans.	*Calculations for units and cost of goods available for sale :
	Date	Units	Total
	01-Jun	162	$1,070
	10-Jun	216	$1,452
	15-Jun	216	$1,480
	28-Jun	162	$1,146
	Available for sale	756	$5,148
	Number of units available for sale = 756 units
	Cost of goods available for sale = $5,148
	*Calculations for average cost per unit :
	Average cost per unit =   Total cost of goods available for sale / Total units available
	$5,148 / 756
	$6.81	per unit
	*Calculations for the cost of ending inventory :
	Ending inventory =   Average cost per unit * Ending inventory units
	$6.81 * 220
	$1,498	(rounded)