The following lots of a particular commodity were available for sale during the year Beginning inventory 8 units at $47 First purchase 16 units at $53 Second purchase 23 units at $24 Third purchase 18 units at $57 The firm uses the periodic system, and there are 21 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? Do not round intermediate calculations. a.$987 b.$1,098 c.$905 d.$1,065

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.