Question

A company sells baseball bats. The following record shows the inventory activity for the month of October: Number of Bats Unit Cost Oct 1 (beginning inventory) 50 $105 Purchases: Oct 12 100 $108 Oct 20 100 $110 Oct 25 200 $112 October Sales 350 Using the average cost method, what is the ending inventory balance?

Answer 1

$10,989.00

Step-by-step explanation:

October records:

Opening stock: 50 unit @ 105 = $5, 250.00

Purchases:

Oct 12: 100 units @ 108 =$ 10,800.00

Oct 20: 100 units @ 110 =$ 11,000.00

Oct 25: 200 units @ 112=$ 22,400.00

Total volume available for October = 450 units

total costs= ($ 5250+10800+11000+22400)=$ 49,450

Average cost per unit =$ 49,450/450 units

=$ 109.89

closing stock or ending inventory:

=opening stock +purchases-sales

=50 +400-350= 100 units

cost of closing stock = 100 units x $ 109.89

=$10, 988.89

=$10,989.00