Answered

From the following table, find total cost to complete the table.

Note: Round your answers to the nearest cent.



Beginning Inventory and Purchases		UnitsUnit CostTotal Dollar Cost

Beginning inventory, January 1		5\$ 2.00

April 10		102.50

May 15		123.00

July 22		153.25

August 19		184.00

September 30		204.20

November 10		324.40

December 15		164.80

Verified Answer :

  • Multiply the 'Units' and 'Unit Cost' for each entry to obtain the individual total costs.
  • Individual costs are: \$10.00, \$25.00, \$36.00, \$48.75, \$72.00, \$84.00, \$140.80, and \$76.80.
  • Sum these individual values to find the overall inventory/purchase cost.
  • The total sum is \(\boxed{\$493.35}\).

Explanation

  1. Calculate Individual Total Dollar Costs

To determine the total inventory cost, we must calculate the individual 'Total Dollar Cost' for each entry by multiplying the 'Units' by the 'Unit Cost'. Finally, we sum these individual costs to find the overall total. The individual costs are computed as follows:

  • Beginning inventory, January 1: \(5 \times \$2.00 = \$10.00\)
  • April 10: \(10 \times \$2.50 = \$25.00\)
  • May 15: \(12 \times \$3.00 = \$36.00\)
  • July 22: \(15 \times \$3.25 = \$48.75\)
  • August 19: \(18 \times \$4.00 = \$72.00\)
  • September 30: \(20 \times \$4.20 = \$84.00\)
  • November 10: \(32 \times \$4.40 = \$140.80\)
  • December 15: \(16 \times \$4.80 = \$76.80\)
  1. Calculate the Final Total Cost

Now that we have all individual 'Total Dollar Cost' values, we calculate the sum of these entries to find the final total inventory cost:
\[Total = \$10.00 + \$25.00 + \$36.00 + \$48.75 + \$72.00 + \$84.00 + \$140.80 + \$76.80\]
Performing the addition:
\[Total = \$493.35\]
The total cost of the inventory is \(\boxed{\$493.35}\).

Examples

Managing inventory costs is essential for any business to track expenses accurately. For instance, a retail store owner uses this calculation method to determine the value of their stock at the end of a quarter. By multiplying the units of items purchased by their respective costs, the owner can better plan budgets, set product prices, and calculate profit margins. This approach helps in maintaining a balanced financial view, ensuring that all incoming resources are accounted for correctly.

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