Priscilla has the following inventory information. $$\begin{array} { r l l r }
\text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 19 & \$ 380 \
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 23 & { 230 } \&&&{ \$ 2,010 }
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the average-cost method, the value of ending inventory is
A) $680.
B) $704.
C) $723.
D) $730.

Question

Priscilla has the following inventory information. $$\begin{array} { r l l r } 
\text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 19 & \$ 380 \
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 23 &  { 230 } \&&&{ \$ 2,010 }
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the average-cost method, the value of ending inventory is
A) $680.
B) $704.
C) $723.
D) $730.

Quizplus · Accepted Answer

The average cost per unit is calculated by dividing the total cost of inventory ($2,010) by the total number of units (100), which gives $20.10 per unit. The ending inventory of 35 units is valued at 35 units * $20.10 = $703.50, rounded to $704.

Priscilla Has the Following Inventory Information A Physical Count of Merchandise Inventory on July 31 Reveals