The following lots of Commodity Z were available for sale during the year. Use this information to answer the questions that follow. Beginning inventory 10 units at $30 First purchase 25 units at $32 Second purchase 30 units at $34 Third purchase 10 units at $35 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year rounded to nearest dollar according to the average cost method?

Ending inventory= $655

Explanation:

Giving the following information:

Beginning inventory 10 units at $30

First purchase 25 units at $32

Second purchase 30 units at $34

Third purchase 10 units at $35

The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year.

Under the weighted-average cost method, the ending inventory cost is calculated by determining the average buying price.

Weighted-average price= (30 + 32 + 34 + 35)/4= $32.75

Now, we can calculate the ending inventory:

Ending inventory= 32.75*20= $655

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