Maxim Corp.has provided the following information about one of its products: During the year,Maxim sold 400 units.
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What is ending inventory using the average cost method?
A)$48,000.
B)$64,000.
C)$50,000.
D)$62,000.

Question

Maxim Corp.has provided the following information about one of its products:  During the year,Maxim sold 400 units.
-
What is ending inventory using the average cost method?
A)$48,000. 
B)$64,000. 
C)$50,000. 
D)$62,000.

Quizplus · Accepted Answer

Ending inventory using the average cost method is calculated by multiplying the average cost per unit by the number of units in ending inventory. In this case, the average cost per unit is $12,000 ($48,000 / 4 units) and the number of units in ending inventory is 4 units. Therefore, the ending inventory using the average cost method is $48,000 (12,000 * 4).