Question

Current Attempt in Progress At May 1, 2022, Vaughn Manufacturing had beginning inventory consisting of 310 units with a unit cost of $7. During May, the company purchased inventory as follows: ▪ 610 units at $7 ▪ 920 units at $8 The company sold 1530 units during the month for $12 per unit. Vaughn Manufacturing uses the average cost method. The value of Vaughn Manufacturing's inventory at May 31, 2022 is (Round average cost per unit to 2 decimal places, e.g. 12.52.) $2480. $13800. $2325. $2170.

Answer 1

$2,325

Step-by-step explanation:

For computing the ending inventory, first we have to compute the average cost per unit which is shown below:

Average cost per unit = Total cost ÷ number of units

= (Beginning inventory units × price per unit + purchase inventory units × price per unit + purchase inventory units × price per unit ) ÷ (Beginning inventory units + purchase inventory units + purchase inventory units)

= (310 units × $7 + 610 units × $7 + 920 units × $8) ÷ (310 units + 610 units + 920 units)

= ($2,170 + $4,270 + $7,360 ) ÷ (1,840 units)

= ($13,800) ÷ (1,840 units)

= $7.5 per unit

Now the ending inventory units equal to

= Number of units for sale - units sold

= 1,840 units - 1,530 units

= 310 units

So, the ending inventory would equal to

= Ending inventory units × average cost per unit

= 310 units × $7.5

= $2,325