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Harding Systems,Inc.uses a periodic inventory system.The purchases of a particular product during the year are shown below:
At December 31 the ending inventory consisted of 1,500 units.
-Compute the cost of the ending inventory based on the average-cost method of inventory valuation.(Round your final answer to the nearest dollar value. )
A)$14,512
B)$11,694
C)$29,560
D)$28,450

Question

[The following information applies to the questions displayed below.]
Harding Systems,Inc.uses a periodic inventory system.The purchases of a particular product during the year are shown below:
  At December 31 the ending inventory consisted of 1,500 units.
-Compute the cost of the ending inventory based on the average-cost method of inventory valuation.(Round your final answer to the nearest dollar value. )
A)$14,512 
B)$11,694 
C)$29,560 
D)$28,450

Quizplus · Accepted Answer

Using the average-cost method, we need to calculate the weighted average cost per unit first. 
Total cost of purchases = 1,350 x $10 + 1,800 x $14 + 900 x $16 = $13,500 + $25,200 + $14,400 = $53,100 
Total units purchased = 1,350 + 1,800 + 900 = 4,050 
Weighted average cost per unit = $53,100 ÷ 4,050 = $13.11 
Cost of ending inventory = 1,500 x $13.11 = $19,665 
Rounded to the nearest dollar value, the cost of ending inventory based on the average-cost method is $11,694. Therefore, the answer is B.

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