Unitech has the following inventory information. A physical count of merchandise inventory on July 31 reveals that there are 75 units on hand. Using the average-cost method, the value of ending inventory is
A) $1,450.
B) $1,500.
C) $1,525.
D) $1,550.

Question

Unitech has the following inventory information.  A physical count of merchandise inventory on July 31 reveals that there are 75 units on hand. Using the average-cost method, the value of ending inventory is
A) $1,450. 
B) $1,500. 
C) $1,525. 
D) $1,550.

Quizplus · Accepted Answer

First, we need to calculate the weighted average unit cost, which is (150*10 + 200*20 + 225*30)/60 = $213.33. 
Then, we can calculate the value of the ending inventory as 75 units * $213.33/unit = $15,999.75. Rounded to the nearest dollar, the answer is $1,500.

Unitech Has the Following Inventory Information