Toddlers' Toyland Using the Average Cost Method of Valuing Inventory

question 37

Short Answer

Toddlers' Toyland using the average cost method of valuing inventory has 75 brown bears remaining in inventory. Toddlers' purchased brown bears over a three-month period as follows: 72 purchased at $3.50 on October 7, 84 purchased at $3.65 on November 7, and 60 purchased at $3.80 on December 7. Compute the value of the ending inventory of bears at average cost.​

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Definitions:

Actual Materials Price

The price actually paid for raw materials used in the production process, which can be compared to the standard or budgeted cost to assess efficiency.

Standard Price

A pre-determined cost that a company expects to pay for materials, labor, and overhead expenses.

Standard Price

A pre-determined cost assigned to a product or service, often used in budgeting and performance evaluations.

Direct Materials

Raw materials that are directly traceable to the production of specific goods or services.