Question

Inventory Costing Methods-Perpetual Method The Luann Company uses the perpetual inventory system. The following July data are for an item in Luann's inventory: July 1 Beginning inventory 30 units @ 10 Purchased $9 per unit 50 units @$11 per unit 15 Sold 60 units 26 Purchased 25 units @$13 per unit Calculate the cost of goods sold for the July 15 sale using (a) first-in, first-out, (b) last-in, first- out, and (c) the weighted-average cost methods. Round your final answers to the nearest dollar. For weighted-average cost, do not round the weighted-average unit cost. A. First-in, First-out: 490 x Cost of Goods Sold: $ B. Last-in, first-out: 710 Cost of Goods Sold $ C. Weighted-average cost: 654 x Cost of Goods Sold $ Check

Answer 1

a) First in first out

Cost of goods sold = (30*9+30*11) = 600

b) Last in first out

Cost of goods sold = (50*11+10*9) = 640

c) Weighted average cost

Cost of goods sold = 820/80*60 = 615