Question

The following information is available for Yancey Company: Beginning inventory 600 units at $4 First purchase 900 units at $6 Second purchase 500 units at $7.20 Assume that Yancey uses a periodic inventory system and that there are 700 units left at the end of the month. Compute the cost of ending inventory and the cost of goods sold using the average-cost method.

Answer 1

Answer:

Ending inventory= $4,011

Explanation:

Giving the following information:

Beginning inventory 600 units at $4

First purchase 900 units at $6

Second purchase 500 units at $7.20

First, we need to calculate the weighted-average cost per unit:

Weighted-average cost per unit= (4 + 6 + 7.2) / 3

Weighted-average cost per unit= $5.73

Now, the ending inventory:

Ending inventory= 5.73*700

Ending inventory= $4,011