Question

New Express had 400 multi-function centers machines in stock at the end of the year. Inventory records for the year are as follows:

DATE QUANTITY COST TOTAL
January 1 Beginning Inventory 50 $142 $7,100
August 5 Purchase 100 269 26,900
October 19 Purchase 100 233 23,300
November 23 Purchase 300 189 56,700
December 16 Purchase 200 157 31,400
Total available for sale 750 $145,400
Using the average cost method of inventory pricing calculate the dollar value of the ending inventory.
a. $69,200.00.
b. $79,200.00.
c. $77,548.00.
d. $85,650.00.

Answer 1

c. $77,548.00.

Step-by-step explanation:

The computation of the ending inventory using the average cost method is as follows;

But before that following calculations need to be done

The Average cost for the fax machines is

= [(50 × 142) + (100 × 269) + (100 × 233) + (300 × 189) + (200 × 15) ] ÷ 750

= 145400 ÷ 750

= $193.86666667

= 193.87

= 400 × 193.87

= $ 77,548