Question

Cornerstone Exercise 6-24 (Algorithmic) Inventory Costing: Average Cost Filimonov Inc. has the following information related to purchases and sales of one of its inventory items: Date Description Units Purchased at Cost Units Sold at Retail June 1 Beginning Inventory 150 units $10-$1,500 9 Purchase 1 200 units $12 = $2,400 14 Sale 1 300 units $25 22 Purchase 2 250 units @ $14 - $3,500 29 Sale 2 212 units $25 Assume that Filimonov uses a perpetual inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the awerage cost method. (Note: Round per unit calculations and final answers to two decimal places.) Cost of goods sold $ 6,313 Cost of ending inventory $ 92,475 Feedback 7 Chock My Work For cost of goods sold and cost of ending inventory using the average cost method, apply the following steps: Step 1: Calculate the cost of goods available for sale immediately prior to the sale transaction Step 2: Apply the inventory costing method, recognizing that under average cost, the cost of goods available for sale is allocated between ending inventory and cost of goods sold, based on a weighted average cost of the goods available for sale (cost of goods available for sale units available for sale) Step 3: Repeat the first two steps for all inventory transactions during the period.

Answer 1

Perpetual inventory method :- Cost of goods sold : For sale of 14th June, Average cost per unit is = (1500-2400)/350 - $ 11.147. Its cost of goods sold is = (300 units * $ 11.14 per unit) Its cost of goods sold is = S 3,342.86). For sale of 29th June, Average cost per unit is = ((50*11.14)+(250*14))/300 - $ 13.5233/. Its cost of goods sold is = (212 units * $ 13.5233 per unit) Its cost of goods sold is = $ 2,866.95/. Total cost of goods sold is = (3342.86+2866.95) Total cost of goods sold is = $ 6,209.80/. Ending inventory is = 88 units Latest average cost per unit is = S 13.52/. (as conputed above) Value of ending inventory is = ((150-200-250-300-212)*13.52) Value of ending inventory is - $ 1,189.76).