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Musya8 [376]
3 years ago
7

Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases

(listed in chronological order of acquisition): 42 units at $109 per unit 74 units at $82 per unit 170 units at $70 per unit Sales for the year totaled 267 units, leaving 19 units on hand at the end of the year. Ending inventory using the average cost method is
Business
1 answer:
madam [21]3 years ago
7 0

Answer:

$1,497.77

Explanation:

From the above information, the following can be deduced;

42 units at $109 per unit

74 units at $82 per unit

170 units at $70

Total units = 42 + 74 + 170 = 286 units

Units left at year end = 19 units

The next step is to compute the total cost in arriving at the ending inventory, using average cost method.

Total cost = [(42 × $109) + (74 × $82) + (170 × $70)]

= $4,578 + $6,068 + $11,900

= $22,546

Per unit cost

= $22,546 ÷ 286 unit

= $78.83 per unit

Therefore, ending inventory

= Per unit cost × Units held at the end of the year

= $78.83 × 19 units

= $1,497.77

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