Answer:
Ending inventory using the average cost method is $1,583
Explanation:
Given in the question,
44 units at $107 per unit
72 units at $77 per unit
174 units at $51 per unit
Total units = 44 + 72 + 174 = 290 units
Units left at the end of year = 24
To calculate the ending inventory using the average cost method, we will first find the average cost of unit during the first year of operations and then muliply it by the units left at hand in the inventory to get answer.
Total cost = [(44× $107) + (72 × $77) + (174× $51)]
= 4,708 + 5,544 + 8,874
Total cost = $19,126
Per unit cost = $19,126 ÷ 290 units = $65.95 per unit
Units held at end of year x cost per unit
= 24 units × $65.95 = $1,583 (rounded)
