Question

Some of the information found on a detail inventory card for Novak Inc. for the first month of operations is as follows. If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, would the amounts shown as ending inventory in (1)FIFO, (2)LIFO, and (3)Average Cost above be the same? What amount would be shown as ending inventory? (Round average cost per unit to 4 decimal places, e.g. 2.7621 and final answers to 0 decimal places, e.g. 6,548.)

		Received
Date		No. of Units		Unit Cost		Issued, No. of Units		Balance, No. of Units
January     2		1,700		$5.19				1,700
7						1,200		500
10		1,100		5.54				1,600
13						1,000		600
18		1,500		5.71		800		1,300
20						1,100		200
23		1,800		5.88				2,000
26						1,300		700
28		2,100		6.06				2,800
31						1,800		1,000

Answer 1

LIFO METHOD

Date	Recived	Issued	Balance inventory
January 2	1,700×5.19=8,823		1,700×5.19=8,823
January 7		1,200×5.19=6,228	500×5.19=2,595
January 10	1,100×5.54=6,094		500×5.19=2,595 1,100×5.54=6,094
January 13		1,000×5.54=5,540	500×5.19=2,595 100×5.54=554
January 18	1,500×5.71=8,565	800×5.71=4,568	500×5.19=2,595 100×5.54=554 700×5.71=3,997
January 20		700×5.54=3,997 100×5.54=554 300×5.19=1,557	200×5.19=1,038
January 23	1,800×5.88=10,584		200×5.19=1,038
January 26		1,300×5.88=7,644	200×5.19=1,038 500×5.88=2,940
January 28	2,100×6.06=12,726		200×5.19=1,039 500×5.88=2,940 2,100×6.06=12,726
January 31		1,800×6.06=10,908	200×5.19=1,038 500×5.88=2,940 300×6.06=1,818

Total Ending inventory = 1,038+2,940+1,818= $5,796

FIFO METHOD

Date	Received	Issued	Balance inventory
January 2	1,700×5.19=8,823		1,700×5.19=8,823
7		1,200×5.19=6,228	500×5.18=2,595
10	1,100×5.54=6,094		500×5.19=2,595 1,100×5.54=6,094
13		500×5.19=2,595 500×5.54=2,770	600×5.54=3,324
18	1,500×5.71=8,565	600×5.54=3,324 200×5.71=1,142	1,300×5.71=7,423
20		1,100×5.71=6,281	200×5.71=1,142
23	1,800×5.58=10,584		200×5.71=1,142 1,800×5.88=10,584
26		200×5.71=1,142 1,100×5.88=6,468	700×5.88=4,116
28	2,100×6.06=12,726		700×5.88=4,116 2,100×6.06=12,726
31		700×5.88=4,116 1,100×6.06=6,666	1000×6.06=6,060

Total cost of ending inventory= $6,060.

Weighted average cost method

Date	Received	Issued	Balance inventory
January 2	1,700×5.19=8,823		1,700×5.19=8,823
7		1,200×5.19=6,228	500×5.19=2,595
10	1,100×5.54=6,094		1,600×5.43=8,689
13		1000×5.43=5,430	600×5.43=3,259
18	1,500×5.71=8,565	800×5.63=4,505	1,300×5.63=7,319
20		1,100×5.63=6,193	200×5.63=1,126
23	1,800×5.85=10,584		2,000×5.85=11,710
26		1,300×5.85=7,611	700×5.85=4,098
28	2,100×6.06=12,726		2,800×6.008=16,824
31		1,800×6.008=10,816	1000×6.008=6,008

Total cost of ending inventory= $6,008.

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