Charlene Cosmetics Company just began business and made the following four inven
ID: 2554742 • Letter: C
Question
Charlene Cosmetics Company just began business and made the following four inventory purchases in June:
June 1 150 units $ 780
June 10 200 units 1,170
June 15 200 units 1,260
June 28 150 units 990
$4,200
A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the average cost method, the amount allocated to the ending inventory on June 30 is
a. $1,229.
b. $1,368.
c. $1,323.
d. $1,260.
Can someone show me step by step how to do this problem?
Explanation / Answer
Average cost=Total cost/Total units
=(4200/(150+200+200+150)=$6 per unit
Hence ending inventory=210 units@$6
=$1260.