Answer:
d. $48,000
Explanation:
The calculation of ending inventory using average cost method is as seen below;
Total units = 200 + 400 + 100
Total units = 700
Total cost = (200 × $140) + (400 × $160) + (100 × $200)
Total cost = $28,000 + $64,000 + $20,000
Total cost = $112,000
Average cost per unit = Total cost ÷ Total unit
Average cost per unit = $112,000 ÷ 700
Average cost per unit = $160
Ending inventory = Total units - Units sold
Ending inventory = 700 - 400
Ending inventory = 300
Therefore, cost of ending inventory
= Ending inventory × Average cost per unit
= 300 × $160
= $48,000
