Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition) : 44 units at $107 per unit 72 units at $77 per unit 174 units at $51 per unit Sales for the year totaled 266 units, leaving 24 units on hand at the end of the year. Ending inventory using the average cost method is

Ending inventory using the average cost method is $1,583

Explanation:

Given in the question,

44 units at $107 per unit

72 units at $77 per unit

174 units at $51 per unit

Total units = 44 + 72 + 174 = 290 units

Units left at the end of year = 24

To calculate the ending inventory using the average cost method, we will first find the average cost of unit during the first year of operations and then muliply it by the units left at hand in the inventory to get answer.

Total cost = [ (44 * $107) + (72 * $77) + (174 * $51) ]

= 4,708 + 5,544 + 8,874

Total cost = $19,126

Per unit cost = $19,126 : 290 units = $65.95 per unit

Units held at end of year x cost per unit

= 24 units * $65.95 = $1,583 (rounded)