kentucky, inc. purchases and sells widgets. the following information summarizes thecompany's operating activities for theyear:

selling and administrative expenses

$5,400

purchases

156,000

sales revenue

783,000

merchandise inventory, january 1

2,500

merchandise inventory, december 31

38,200

if the company sold 7,100 units of widgets during the year, how much is the cost for one widget? (round your answer to the nearest cent.)

$16.9 per widget

Explanation:

Given that,

Beginning inventory = $2,500

Purchases  = $156,000

Ending inventory = $38,200

Sales Revenue = $783,000

Selling and Administrative Expenses = $5,400

Total cost of the 7,100 widgets:

= Beginning inventory + Purchases - Ending inventory

= $2,500 + $156,000 - $38,200

= $120,300

Therefore,

Cost of one widget = Total cost of the 7,100 widgets ÷ Number of widgets

                                = $120,300 ÷ 7,100

                                = $16.9 per widget

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