Question

Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):
· 40 units at $100
· 70 units at $80
· 170 units at $60

Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year. Ending inventory using the average cost method (rounded) is:

Select one:

a. $650

b. $707

c. $1,000

d. $600

Answer 1

Answer:

The correct answer is $800

Explanation:

Giving the following information:

Fulbright Corp. uses the periodic inventory system.

Fulbright made the following purchases (listed in chronological order of acquisition):

· 40 units at $100

· 70 units at $80

· 170 units at $60

Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year.

Ending inventory= [(100 + 80 + 60)/3]*10

Ending inventory= 80*10= $800