Question

A company purchased inventory as follows: 150 units at $10 350 units at $12 The average unit cost for inventory is

Answer 1

the average cost for inventory is $11.40

Step-by-step explanation:

The computation of the average units for cost is shown below:

= Total purchase ÷ total purchase units

= (150 units × $10 + 350 units × $12) ÷ (150 units + 350 units)

= ($1,500 + $4,200) ÷ (500 units)

= ($5,700) ÷ (500 units)

= $11.40

Hence, the average cost for inventory is $11.40

We simply applied the above formula and the same is to be considered