1. A company uses the periodic average cost method to account for inventory. For the year, the company had the following beginning inventory and purchases:

Beginning inventory on January 1	100 units	at	$	2,800	per unit
Purchase on March 1	400 units	at	$	3,000	per unit
Purchase on September 1	800 units	at	$	3,200	per unit

Sales for the year totaled 1,000 units, leaving 300 units on hand at the end of the year. The company reported ending inventory for $900,000. Which of the following is correct?

1. The amount reported for ending inventory is incorrect because management used a simple average instead of weighted-average to calculate the unit cost of inventory for the year.
2. The amount reported for ending inventory cannot be determined with the information given because the amount depends on which of the 1,000 units were assumed to be sold.
3. The amount reported for ending inventory is incorrect because the unit cost of ending inventory should be the average cost of the last 300 units purchased.
4. The amount reported for ending inventory is correct.