Unitech has the following inventory information. July 1 Beginning Inventory 20 units at $19 $ 380 7 Purchases 70 units at $20 1,
400 22 Purchases 10 units at $22 220 $2,000 A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the average-cost method, the value of ending inventory is A. $580. B. $600. C. $610. D. $620.
The average cost method assigns a cost to inventory items based on the total cost of goods purchased (or produced) in a period divided by the total number of items purchased (or produced). Weighted Average Unit Cost is calculated by following formula:
Weighted Average Unit Cost = Total Cost of Inventory
/Total Units in Inventory
Total value purchased in July = $1,400+$220 = $1,620
Weighted Average Unit Cost = ($380+$1,620)/100 = $20
Ending inventory = 30 x $20 = $600
Noted: The company did not have date of selling merchandise. In the situation, assuming that the company uses periodic inventory system.
Price: $20, how many units to maximize the total utility
Let X is the number of units we need to find
As we know that, the law of equal-marginal utility a consumer spends his or her income among goods so that utilities receive from the amount spent is equal. So we use a simple rule of three:
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