Noise Makers Inc.has the following inventory data: $$\begin{array} { r l r r }
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &330\
&&&\$3,000
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 48 units on hand.Using the average cost method the value of ending inventory is
A)$930.
B)$960.
C)$976.
D)$990.

Question

Noise Makers Inc.has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &330\
&&&\$3,000
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 48 units on hand.Using the average cost method the value of ending inventory is
A)$930.
B)$960.
C)$976.
D)$990.

Quizplus · Accepted Answer

The average cost per unit is calculated by dividing the total cost of inventory ($3,000) by the total number of units (150). The average cost per unit is $20. The ending inventory value is 48 units multiplied by the average cost per unit ($20), which equals $960.

Noise Makers Inc A Physical Count of Merchandise Inventory on July 31 Reveals