Maxim Corp. has provided the following information about one of its products: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 220 $ 144 6/5 Purchase 420 $ 164 11/10 Purchase 120 $ 204 During the year, Maxim sold 440 units. What is ending inventory using the average cost method? (Do

52,650 approx

Explanation:

The calculation of ending inventory using average cost method is shown below:-

Total Units = 220 + 420 + 120

= 760

Total cost = (220 * $144) + (420 * $164) + (120 * $204)

= $31,680 + $68,880 + $24,480

= $125,040

Average cost per unit = $125,040 : 760

= 164.53

Ending inventory = Total units - units sold

= 760 - 440

= 320

Cost of ending inventory = Ending inventory * Average cost per unit

= 320 * 164.53

= 52,650 approx