Coronado has the following inventory information. july1beginning inventory15 units at $20$300 7purchases90 units at $232070 22purchases20 units at $25500 $2870 a physical count of merchandise inventory on july 31 reveals that there are 25 units on hand. using the average-cost method, the value of ending inventory is

$574

Explanation:

Given:

Beginning inventory 15 units @ $20 = 15 × 20 = $300

Purchases of 90 units @ $23 = 90 × 23 = $2,070

Purchases of $20 units @25 = $500

Total cost = 300 + 2070 + 500 = $2,870

Total units purchased = 15 + 90 + 20 = 125 units

Average cost = Total cost / total units purchased

                     = 2,870 / 125

                     = $22.96

Ending inventory units = 25

As per average cost method, value of ending inventory = 25 × 22.96

                                                                                              = $574