Question

Exercise 6-15 CES Pronghorn Corp sells a snowboard, EZslide, that is popular with snowboard enth month, 106 EZslide snowboards were sold. Total Cost $1 164 Unit Cost Units Explanation Date $97 12 Inventory Sept. 1 4,900 49 100 Purchases Sept. 12 4,848 48 101 Purchases Sept. 19 102 1,938 19 Purchases Sept. 26 $12,850 128 Totals Additional data regarding the company's sales of EZslide snowboards are provided Units Date Sept. 5 Sale Study Sale 50 Sept. 16 49 Sept. 29 Sale 106 Totals Calculate the average unit cost. (Round answers to 3 decimal places, e.g. 5.125 September 1 $ September 5 September 12 $ September 16 $ September 19 $ September 26 $ September 29

Answer 1

Average Cost per unit:

September 1 ($97/1)	$97
September 5 ($97/1)	$97
September 12 ($97 + $100)/2	$98.50
September 16 ($97 + $100)/2	$98.50
September 19 ($97 + $100 + $101)/3	$99.33
September 26 ($97 + $100 + $101 + $102)/4	$100
September 29 ($97 + $100 + $101 + $102)/4	$100

Total Units available	128
Less: Units sold	106
Units in Ending Inventory	22

FIFO:
Units (a)	Rate (b)	Amount (a * b)
19	$102	$1,938
22 - 19 = 3	$101	$303
22		$2,241

Therefore, ending inventory under FIFO is $2,241.

LIFO:
Units (a)	Rate (b)	Amount (a * b)
12	$97	$1,164
22 - 12 = 10	$100	$1,000
22		$2,164

Therefore, ending inventory under LIFO is $2,164.

Average Cost:
Units (a)	Rate (b)	Amount (a * b)
22	$100	$2,200

Therefore, ending inventory under average cost method is $2,200.