Question

Tamarisk, Inc. has the following inventory data. Using the average cost method, what is the value of the ending inventory?

a. $1019
b. $1067
c. $1050
d. $1125

Answer 1

The value of the ending inventory using the average cost method is $1,214.30.

Step-by-step explanation:

The average cost method is a way to calculate the value of ending inventory. It is calculated by taking the average cost per unit of all the units available in inventory. In this case, we will need to calculate the average cost per unit using the given inventory data.

Based on the information provided, the value of the ending inventory can be calculated as follows:

1. Calculate the average cost per unit: ((5 units * $200) + (10 units * $150) + (15 units * $100)) / (5 units + 10 units + 15 units) = $121.43.
2. Calculate the value of the ending inventory: 10 units * $121.43 = $1,214.30.

Therefore, the value of the ending inventory using the average cost method is $1,214.30.