Question

Consider the following information for Maynor Company, which uses a periodic inventory system: Units 22 Transaction Beginning Inventory Purchase Purchase Purchase Unit Cost $72 78 January 1 March 28 August 22 October 14 Total Cost $ 1,584 2,496 3,608 4,312 Goods Available for Sale 147 $12,000 The company sold 49 units on May 1 and 44 units on October 28. Required: Calculate the company's ending inventory and cost of goods sold using the each of following invento, costing methods. (Round the per unit cost to two decimal places and then round your answert

Answer 1

Part A

FIFO: In FIFO, for sale units first goes out from the oldest purchase and then from the newest purchase.

Ending inventory	$4722
Cost of goods sold	$7278

Units in ending inventory = units of goods available for sale – unit sold = 147-(49+44) = 54

Ending inventory = (49*88)+(5*82) = $4722

Cost of goods sold = (22*72)+(32*78)+(39*82) = $7278

Part B

LIFO: In LIFO, for sale units first goes out from the newest purchase and then from the oldest purchase.

Ending inventory	$4080
Cost of goods sold	$7920

Units in ending inventory = units of goods available for sale – unit sold = 147-(49+44) = 54

Ending inventory =(22*72)+(32*78) = $4080

Cost of goods sold = (44*82)+ (49*88) = $7920

Part C

Weighted average

Weighted average price per unit = total cost of goods available for sale / total units of goods available for sale = 12000/147 = $81.63

Ending inventory	$4408
Cost of goods sold	$7592

Units in ending inventory = units of goods available for sale – unit sold = 147-(49+44) = 54

Ending inventory =54*81.63 =$4408

Cost of goods sold = 93*81.63 =$7592