What will be the issued price of 700 units; using simple average method?

Use the information below to answer this question.

Jejelaye Plc stock records for 2009 was given below:

Jan 1 received 100 units at N1.00

Jan 8 received 260 units at N1.05

Jan 20 issued 700units at ______

Feb 3 received 400 units at N1.15

A. N1.183
B. N1.025
C. N1.00
D. N1.05

Correct Answer:

Option B – N1.025

Explanation

Simple average method usually add up all receipt prices ahead of the issued material divided by 2