Question

Periodic Inventory Using FIFO, LIFO, and weighted Average Cost Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 10 units at $35 $350 Aug. 7 Purchase 19 units at $38 722 Dec. 11 Purchase 12 units at $40 480 41 units $1,552 There are 16 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first- in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (round per unit cost to two decimal places and your final answer to the nearest whole dollar). a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost

Answer 1

a. First-in, first-out (FIFO) b. Last-in, last-out (LIFO) c. Weighted Average Cost 632 578 606 Working notes : FIFO Method Ending inventory Aug. 7 Purchase (4*$38) Dec.11 purcahse (12*$40) 152 480 632 LIFO Method Ending inventory Jan. 1 Inventory (10*$35) Aug. 7 Purchase (6*$38) 350 228 578 Weighted Average Cost Weighted Average Cost per unit= Cost of Goods availble for sale / no of Units produced = $1,552/41 = $37.85 Ending Inventory =16*$37.85 = $606