A company has a beginning inventory of $ 20,000 and purchasesduring the year of...

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Accounting

A company has a beginning inventory of $ 20,000 and purchasesduring the year of $ 160,000. The beginning inventory consisted of2,000units and 8,000 units were purchased during the year. 3,880units remain in ending inventory. The cost of the ending inventoryusing the? average-cost method will? be: (Round any intermediarycalculations to two decimal places and your final answer to thenearest? dollar.)

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Step-1:Calculation of weighted average cost per unit

	Particulars		Units	Total Cost
	Beginning Inventory		2,000	$ 20,000
	Purchase		8,000	$ 1,60,000

	Total		10,000	$ 1,80,000


	Average cost per unit		=	$ 1,80,000	/	10,000
			=	$ 18.00

Step-2:Calculation of Cost of ending inventory

	Cost of Ending Inventory		=	Units in ending Inventory x Averge cost per unit
			=	3880	x	$ 18.00
			=	$ 69,840

	Thus,
		Cost of ending inventory is		$ 69,840

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In: AccountingA company has a beginning inventory of $ 20,000 and purchasesduring the year of $...A company has a beginning inventory of $ 20,000 and purchasesduring the year of $ 160,000. The beginning inventory consisted of2,000units and 8,000 units were purchased during the year. 3,880units remain in ending inventory. The cost of the ending inventoryusing the? average-cost method will? be: (Round any intermediarycalculations to two decimal places and your final answer to thenearest? dollar.)