John Adams Company's record of transactions for the month of April was as follows:**Purchases:**- April 1 (balance on hand): 600 units @ $6.00- April 4: 1,500 units @ $6.08- April 8: 800 units @ $6.40- April 13: 1,200 units @ $6.50- April 21: 700 units @ $6.90- April 29: 500 units @ $6.79**Total Purchases: 5,300 units****Sales:**- April 3: 500 units @ $10.00- April 9: 1,400 units @ $10.00- April 11: 600 units @ $11.00- April 23: 800 units @ $11.00- April 27: 900 units @ $12.00**Total Sales: 4,600 units****Task:**Assuming that periodic inventory records are kept in units only, calculate the average cost per unit. (Round answer to 2 decimal places, e.g., 2.76).**Average cost per unit: $__________ per unit**

Lets understand the basics.Average cost per unit calculated by dividing the cost of beginning inventory and purchases with all units in beginning inventory and purchases.Average cost per unit = (Cost of beginning inventory + Cost of purchases)/(Units in beginning inventory + Units in purchases)So here in this case, DateUnits Per unitTotalApril 1 (balance on hand) 6006 3,6004 1,5006.08 9,1208 8006.4 5,12013 1,2006.5 7,80021 7006.6 4,62029 5006.79 3,395 5,300 33,655Average cost per unit = $33,655/5,300 = $6.35Therefore average cost per unit is $6.35 per unit.

Business

Accounting

April 1 (balance on hand) 4 8 13 21 Purchases 29 600 @ $6.00 6.08 6.40 6.50 6.60 6.79 1,500 @ 800 @ 1.200 @ 700 @ 500 @ 5,300 Sales April 3 500 @ $10.00 9 11 23 27 1,400 @ 10.00 600 @ 11.00 1.200 @ 11.00 900 @ 12.00 4,600

April 1 (balance on hand) 4 8 13 21 Purchases 29 600 @ $6.00 6.08 6.40 6.50 6.60 6.79 1,500 @ 800 @ 1.200 @ 700 @ 500 @ 5,300 Sales April 3 500 @ $10.00 9 11 23 27 1,400 @ 10.00 600 @ 11.00 1.200 @ 11.00 900 @ 12.00 4,600

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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