Question

During June, the following changes in inventory item 27 took place: June 1 Balance 1,400 units@£24 14 Purchased 900 units@£36 24 Purchased 700 units@E30 8 Sold 400 units@E50 1,000 units@E40 500 units@E44 10 Sold 29 Sald Perpetual inventories are maintained in units only Instructions What is the cost of the ending inventory for item 27 under the following methods? (Show calculations.) (a) FIFO (b) Average Cost

Answer 1

(a) £ (b) f 35,400 36,713 (a) FIFO Method Cost of Cost of Quantity PurchasesPurchasesQuantity Purchased Unit Cost Total cost Inventory InventoryInventory Quantity Unit Cost Merchandise Merchandise sold Unit Cost Sold Total cost Date Sold Total Cost 24 £ 24 £24,000 June.1 June. 8 June. 10 June. 14 June. 24 1,400 £ 1,000 £ Of 900 £ 900 £ 700 £ 33,600 24 £ 24 £ 400£ 9,600 1,000£ 24,000 900 £ 700 £ 36 £32,400 30 £ 36 32,400 36 £32,400 30 21,000 36 £ 21,000 June. 29 36 £ 400 500f 18,000 14,400 30 21,000 £ 35,400 700 £ Total £ 51,600

Weighted Average Cost Cost of Cost of Quantity Purchases Purchases Quantity Purchased Unit Cost Total cost Inventory InventoryInventory Quantity Unit Cost Total Cost Merchandise Merchandise sold Unit Cost Sold Total cost Date Sold 24 33,600 24 24,000 June.1 June. 8 June. 10 1,400 £ 1,000 £ 24 £ 24 £ 400 f 9,600 1,000 £ 24,000 36 32,400 30 21,000 900 £ 700£ 900 £ 900 £ 700£ 36 32,400 36 32,400 30 21,000 June, 14 June. 24 1,600 £ 1,100 £ 33 £ 53,400 June. 29 33 36,713 £ 36,713 16,688 500 £ 33 £ Total 50,288