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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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4.1 Ratings (554 Votes)

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.)

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