lus.com/edugen/student/mainfr.uni WileyPLUS ols Help Kieso, Intermediate Account

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lus.com/edugen/student/mainfr.uni WileyPLUS ols Help Kieso, Intermediate Accounting, 16e Gradebook ORION Downloadable eTextbook Problem 8-5 Some of the information found on a detail inventory card for Cheyenne Inc. for the first month of operations is as follows Issued, Balance January 2 1,400 $3.57 1,400 500 1,300 600 1,300 200 1,700 700 2,500 1,000 900 10 800 3.81 13 700 18 20 23 26 28 31 1,200 3.93 1,100 4.05 1,000 1,800 4.17 1,500 Calculate average-cost per unit. (Round answer to 2 decimal places, e.g. 2.76.) Average-cost per unit All Rights Reserved. A Division of

Explanation / Answer

The average cost per unit is calculated by adding total purchase cost divided by number of units purchase.

Average cost = total cost of purchases /number of units.

Total cost = (1,400*3.57)+(800*3.81)+(1,200*3.93)+(1,500*4.05)+(1800*4.17) = $26,343.

Total units= 1,400+800+1,200+1,500+1,800 = 6,700 units

Total cost = $26,343

Average cost = 26,343/6,700 = $3.93 per unit.

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