Asked by Ahlam Zehdi on May 09, 2024
Verified
A small-appliance merchant using the average cost method of valuing inventory has 65 toasters remaining in inventory. The merchant purchased toasters over a three-month period as follows: 40 purchased at $8.00 on April 1, 60 purchased at $7.70 on May 1, and 20 purchased at $7.80 on June 1. Compute the value of the ending inventory of toasters at average cost.
Average Cost Method
An inventory costing method where the cost of goods sold and ending inventory values are determined by calculating the average cost of all similar items in the inventory.
Ending Inventory
The total value of goods available for sale at the end of an accounting period, after accounting for purchases and sales during the period.
Toasters
Electrical appliances designed for browning slices of bread through the application of radiant heat.
- Understand and enact inventory valuation principles including the techniques of LIFO, FIFO, and average cost analysis.
- Gauge the end-of-period inventory valuation by applying differential inventory valuation approaches.
Verified Answer
Learning Objectives
- Understand and enact inventory valuation principles including the techniques of LIFO, FIFO, and average cost analysis.
- Gauge the end-of-period inventory valuation by applying differential inventory valuation approaches.
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