Given the following data, calculate the cost of ending inventory using the average cost method. (Round any intermediary and final answers to two decimal places.)

Date Item Unit
1/1 Beginning inventory 70 units at $ 30.00 per unit
3/5 Purchase of inventory 10 units at $ 10.00 per unit
5/30 Purchase of inventory 15 units at $ 12.00 per unit
12/31 Ending inventory 10 units

Explanation:

using the weighted average method

average cost per unit  = total cost/total units

begning stock 70*30                  =  2100

purchases        10*10                   =    100

                                                          2200/80

w. average per unit cost             =  27.5

purchases 15*12                           =  180

                                                          2200+180=2380/(100+15)

w. average per unit cost             = 20.70

there is no purchase after the 5/30 therefore the cost of ending stock under average method will be 20.7 per unit and 20.7*10 =207 total closing cost.

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