Stellar Corporation began operations on December 1, 2016. The only inventory transaction in 2016 was the purchase of inventory on December 10, 2016, at a cost of $24 per unit. None of this inventory was sold in 2016. Relevant information is as follows. Ending inventory units            December 31, 2016       175    December 31, 2017, by purchase date               December 2, 2017   175           July 20, 2017   50   225 During the year 2017, the following purchases and sales were made. Purchases   Sales March 15   375 units  at  $28   April 10   275 July 20   375 units  at  30   August 20   375 September 4   275 units  at  33   November 18   225 December 2   175 units  at  35   December 12   275 The company uses the periodic inventory method.           Calculate average-cost per unit. (Round answer to 2 decimal places, e.e. 2.76.) Average-cost   $

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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.