In its first month of operations, Sheffield Corp. made three purchases of merchandise in the following sequence: (1) 350 units at $8, (2) 400 units at $9, and (3) 500 units at $10. Calculate average unit cost. (Round answer to 3 decimal places, e.g. 5.125.)Average unit cost $___________________

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Asked Nov 8, 2019
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In its first month of operations, Sheffield Corp. made three purchases of merchandise in the following sequence: (1) 350 units at $8, (2) 400 units at $9, and (3) 500 units at $10.

 

Calculate average unit cost. (Round answer to 3 decimal places, e.g. 5.125.)

Average unit cost
  $___________________

 

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Expert Answer

Step 1

Hence, the total number of units purchased is 1250 units. It is the sum of first, second and third purchase.

(First purchase Second purchase
Total number of units purchased
+Third purchase
= 350 units+400 units + 500 units
1250 units
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(First purchase Second purchase Total number of units purchased +Third purchase = 350 units+400 units + 500 units 1250 units

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Step 2

Hence, $11,400 is the total cost. It is obtained by the addition of the product...

(Number of units x Purchase price.
1st purchase
Total cost (Number of units x Purchase price)
2nd purchase
+(Number of units x Purchase price)
3rd purchase
(350 units x $8) +(400 units x $9)+
(500 units x $10)
$2,800 $3,600 $5,000
=$11 400
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(Number of units x Purchase price. 1st purchase Total cost (Number of units x Purchase price) 2nd purchase +(Number of units x Purchase price) 3rd purchase (350 units x $8) +(400 units x $9)+ (500 units x $10) $2,800 $3,600 $5,000 =$11 400

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