Question

Presented below is information related to Blowfish radios for the Nash Company for the month of July. Units Sold Selling Price Total Units In Unit Cost 120 $4.10 960 4.20 Total $ 492 4,032 $6.80 7.10 $2,448 2,556 480 4.502,160 Date Transaction July 1 Balance 6 Purchase 7 Sale 10 Sale 12 Purchase 15 Sale 18 Purchase 22 Sale 25 Purchase 30 Sale Totals 7.20 1.728 360 4.60 1,656 7.20 3,456 600 2,748 7.30 240 1,680 1,752 $11,940 2,520 $11,088 Calculate average cost per unit. (Round answer to 2 decimal places, es. 2.76.) Weighted-average cost $

Answer 1

Correct Answer:

Requirement 1:

Weighted Average Cost Per unit
Units		(A)	2520 Units
Total Cost		(B)	$                11,088.00
Average Cost		(C=B/A)	$                           4.40

Requirement 2:

	FIFO	LIFO	Weighted Average
Ending Inventory	$ 3,852.00	$ 3,516.00	$ 3,696.00

Working:

	FIFO
A	Total Units Available for sale			2520		$                       11,088.00
	Units Sold			1680
	Ending Inventory Units			840
	Valuation
	Cost of Goods Sold		120		$                           4.10	$                             492.00
			960		$                           4.20	$                         4,032.00
			480		$                           4.50	$                         2,160.00
			120		$                           4.60	$                             552.00
B	Cost of Goods Sold		1680	units		$                         7,236.00
A-B	Ending Inventory		840	units		$                         3,852.00

	LIFO
A	Total Units Available for sale			2520		$                      11,088.00
	Units Sold			1680
	Ending Inventory Units			840
	Valuation
	Cost of Goods Sold		600.00		$                           4.58	2,748.00
			360.00		$                           4.60	1,656.00
			480.00		$                           4.50	2,160.00
			240.00		$                           4.20	1,008.00
B	Cost of Goods Sold		1680	units		$                         7,572.00
A-B	Ending Inventory		840	units		$                         3,516.00

	Weighted Average
A	Total Units Available for sale			2520		$                       11,088.00
	Units Sold			1680
	Ending Inventory Units			840
	Valuation
B	Cost of Goods Sold		1680	units	$ 4.40	$                         7,392.00
A-B	Ending Inventory		840	units		$                         3,696.00

Requirement 3:

LIFO method will yield the lowest gross profit.

Requirement 4:

LIFO method will yield the lowest figure for ending inventory for the balance sheet.

End of answer.

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