A company just starting a business purchased three inventory items at the following prices: March 2, $75; March 7, $80; and March 15, $90. If the company sold one unit for $115 on March 10 and one unit for $125 on March 20 and uses the average cost formula in a perpetual inventory system, what is the cost of ending inventory?
A)$81.67
B)$83.75
C)$90.00
D)$125.00

Question

Quizplus · Accepted Answer

The average cost per unit is calculated as ($75 + $80 + $90) / 3 = $81.67. After selling two units, the ending inventory is one unit at the average cost of $81.67.

A Company Just Starting a Business Purchased Three Inventory Items