Gecko Enterprises had the following inventory data:
Assuming average cost, what is the ending inventory after the July 14 sale? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A) $232
B) $240
C) $204
D) $216
A) $232
Explanation: Two-step process: determine average cost for July 7 sale and remainder balance, then determine average cost following July 11 purchase. (July 1 quantity × cost) + (July 4 quantity × cost)/15 = average per unit; take average × sale and subtract from balance. (July 11 quantity × cost) + balance/quantity = average per unit; take average × July 14 quantity; subtract from balance for ending inventory.
Ex: (5 × $48) + (10 × $54)/(5 + 10) = $52; $52 × 12 = $624. $((5 × $48) + (10 × $54)) - $624 = $156 (and 3 units). [(9 × $60) + $156]/12 = $58.00; $58.00 × 8 = $464.00. $696 - $464.00 = $232.
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