Question

Problem 6-3A Sekhon Company had a beginning inventory on January 1 of 181 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made. Mar. 15 452 units at $23 Sept. 4 373 units at $25 uly 20 283 units at $24Dec. 2 113 units at $26 1,130 units were sold. Sekhon Company uses a periodic inventory system Your answer is correct. Determine the cost of goods available for sale. The cost of goods available for sale 33,071 VIDEO, SIMILAR PROlu Your answer is correct Calculate average cost per unit. (Round answer to 3 decimal places, e.g. 1.250. Average cost per unit 23.588

Answer 1

	FIFO	LIFO	Average Cost
The ending Inventory	$    6,913	$    5,713	$    6,416
The cost of goods sold	$ 26,158	$ 27,358	$ 26,655
(1) FIFO results in highest inventory amount, $6,913
(2) LIFO results in highest cost of goods sold, $27,358
Workings:
	Cost of goods available for sale			Cost of goods sold - Periodic FIFO			Ending Inventory - Periodic FIFO
FIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Purchases:
Jan-01	181	$    20.00	$    3,620	181	$    20.00	$    3,620	-	$    20.00	$           -
Mar-15	452	$    23.00	$ 10,396	452	$    23.00	$ 10,396	-	$    23.00	$           -
Jul-20	283	$    24.00	$    6,792	283	$    24.00	$    6,792	-	$    24.00	$           -
Sep-04	373	$    25.00	$    9,325	214	$    25.00	$    5,350	159	$    25.00	$    3,975
Dec-02	113	$    26.00	$    2,938	0	$    26.00	$           -	113	$    26.00	$    2,938
	1,402		$ 33,071	1,130		$ 26,158	272		$    6,913
	Cost of goods available for sale			Cost of goods sold - Periodic FIFO			Ending Inventory - Periodic FIFO
FIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Purchases:
Jan-01	181	$    20.00	$    3,620	0	$    20.00	$           -	181	$    20.00	$    3,620
Mar-15	452	$    23.00	$ 10,396	361	$    23.00	$    8,303	91	$    23.00	$    2,093
Jul-20	283	$    24.00	$    6,792	283	$    24.00	$    6,792	-	$    24.00	$           -
Sep-04	373	$    25.00	$    9,325	373	$    25.00	$    9,325	-	$    25.00	$           -
Dec-02	113	$    26.00	$    2,938	113	$    26.00	$    2,938	-	$    26.00	$           -
	1,402		$ 33,071	1,130		$ 27,358	272		$    5,713
	Cost of goods available for sale			Cost of goods sold - Periodic FIFO			Ending Inventory - Periodic FIFO
FIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Purchases:
Jan-01	181	$    20.00	$    3,620
Mar-15	452	$    23.00	$ 10,396
Jul-20	283	$    24.00	$    6,792
Sep-04	373	$    25.00	$    9,325
Dec-02	113	$    26.00	$    2,938
	1,402		$ 33,071	1,130	$ 23.588	$ 26,655	272	$ 23.588	$    6,416
*Average Cost	=	Cost of goods available for sale / No. Of units
	=	$33,071/1,402 units
	=	$23.588