Question

Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):· 40 units at $100· 70 units at $80· 170 units at $60Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year. Ending inventory using the average cost method (rounded) is:Select one:a. $650b. $707c. $1,000d. $600

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Purchases:

40 units at $100·

70 units at $80·

170 units at $60

Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year.

First, we need to calculate the average purchase cost.

Average cost= (100*40 + 80*70 + 60*170)/280= $70.7

Now, we can calculate the value of ending inventory:

Inventory= $70.7*10= $707