se the following information to answer question 11 and 12 Th

se the following information to answer question 11 and 12. The following information was available from the inventory records of Rich Company fo January: Units Unit Cost Balance at January 1 Purchases: Total Cost $29,310 3,000 $9.77 January 6 2,000 $10.30 $20,600

Solution

(11).

Answer is option (B). $12284

Explanation;

Total cost of inventory available for sale ($29310 + $20600 + $28917) = $78827

Total number of units available for sale (3000 + 2000 + 2700) = 7700

Thus average cost per unit ($78827 / 7700) = $10.237

As per information of the question, ending units are = 1200

Thus value of inventory (1200 * $10.237) = $12284.4 (Approx.)

(12).

Answer is option (D). $12432

Explanation;

First of all let’s calculate moving average on January 6 and January 26;

Average cost on January 6;

Average cost ($29310 + $20600) / (3000 + 2000) = $9.982 per unit

Average cost on January 26;

Average cost will be calculated as follow;

($29310 + $20600 + $28917 – $24955) / (3000 + 2000 + 2700 - 2500)

= $53872 / 5200

= $10.36 per unit

Ending units are given = 1200

Thus value of ending inventory will be (1200 * $10.36) = $12432