Question

At May 1, 2022, Concord Corporation had beginning inventory consisting of 240 units with a unit cost of $6. During May, the company purchased inventory as follows: ▪ 480 units at $6 ▪ 720 units at $6 The company sold 1200 units during the month for $10 per unit. Concord Corporation uses the average cost method. The value of Concord Corporation's inventory at May 31, 2022 is (Round average cost per unit to 2 decimal places, e.g. 12.52.) $1440. $1440. $8640. $1440.

Answer 1

Date	Units	Unit cost	Total cost
May 1	240	$6	$1,440
May	480	$6	$2,880
May	720	$6	$4,320
	1,440		$8,640

Number of units available for sale = 1,440

Number of units sold = 1,200

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

= 1,440 - 1,200

= 240

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

= 8,640/1,440

= $6

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

= 240 x 6

= $1,440