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:___________.

Answer 1

Answer:

The value of Concord Corporation's inventory at May 31, 2022 is: $ 1,440

Explanation:

Weighted Average Cost Method Calculates a New Cost of Inventory following each Purchase

Calculation of New Cost and Inventory value is as follows :

Unit Cost = Total Cost / Total Units

                =((240×$6)+( 480×$6)+(720×$6))/(240+480+720)

                = $ 8,640 / 1440

                = $ 6

Units Remaining = 240+480+720-1200

                            = 240

Inventory Value = 240×$ 6

                           =$ 1,440