Inventory Cost Flows—Average Cost On January 1, 2001, the Pocket Phone Corporation had 1,500 cell phones in inventory at an average cost of $27. During 2001, total sales of phones was $210,000 and the ending inventory on December 31 was 1,000 units. Purchases during 2001 were:

Using the average cost flow assumption:

a. What was the cost of Pocket Phone’s ending inventory?

b. Compute the cost of goods sold and gross profit for 2001.

c. Compute the gross profit percentage and the inventory turnover for 2001.

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Purchases Units Unit Cost 1st quarter 1,000 $28.00 2nd quarter 1,200 30.00 3rd quarter 800 32.50