The following units of an inventory item were available for sale during the year: beginning inventory 10 units at $55first purchase 25 units at $60second purchase 30 units at $65third purchase 15 units at $70the firm uses the periodic inventory system. during the year, 60 units of the item were sold. the value of ending inventory using average cost is:
$1,353$1,263$1,375$1,150

$1263

Explanation:

Given: Beginning inventory 10 units at $55

           First purchase 25 units at $60

           Second purchase 30 units at $65

           Third purchase 15 units at $70.

First, finding Total cost of available inventory to know weighted average cost.

Total cost=

∴ Beginning inventory=  

           First purchase=  

           Second purchase=  

           Third purchase = .

Total units available for sale=

Total cost of available inventory=

Now, finding Weighted average cost.

Weighted average cost=

Weighted average cost=

∴ Weighted average cost= $ 63.125.

As given, 60 units sold during the year, which mean 20 units is still remaining out of total 80 units.

The value of ending inventory=

∴ The value of ending inventory=

∴ The value of ending inventory using average cost is $1263

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