Question

Please find average cost and show all calculations.

Tamarisk, Inc, markets CDs of numerous performing artists. At the beginning of March, Tamarisk had in beginning inventory 2,600 CDs with a unit cost of $7. During March, Tamarisk made the following purchases of CDs. March 5 March 13 2,200 @ $8 3,600 @ $9 March 21 5,400 @ $10 March 26 2,200 @ $11 During March 12,100 units were sold. Tamarisk uses a periodic inventory system. Your answer is correct. Determine the cost of goods available for sale. The cost of goods available for sale $ ele $ Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)

Answer 1

COST OF GOODS AVAILABLE FOR SALE

DATE	DESCRIPTION	QUANTITY	PER UNIT COST	TOTAL COST
MARCH 1	BEGINING INV	2,600	$ 7	$ 18,200
MARCH 5	PURCHASE	2,200	$ 8	$ 17,600
MARCH 13	PURCHASE	3,600	$ 9	$ 32,400
MARCH 21	PURCHASE	5,400	$ 10	$ 54,000
MARCH 26	PURCHASE	2,200	$ 11	$ 24,200
	TOTAL	16,000 UNITS		$ 146,400

AVERAGE COST = TOTAL COST OF GOODS AVAILABLE FOR SALE/TOTAL UNITS

= $ 146,400/16,000

= 9.15 PER UNIT

	FIFO	LIFO	AVERAGE-COST
THE ENDING INVENTORY	41,200	28,600	35,685
THE COST OF GOODS SOLD	105,200	117,800	110,715

TOTAL UNITS SOLD =12,100 UNITS

ENDING INVENTORY IN UNITS = 16,000 UNITS - 12,100 UNITS

= 3,900 UNITS

IN CASE OF FIFO = OUT OF3,900 UNITS 2,200 UNITS IS FROM MARCH 26 AND 1,700 UNITS (3,900-2,200) IS FROM MARCH 21

SO ENDING INVENTORY IN FIFO= 2,200 * 11=24,200

1,700 * 10= 17,000

TOTAL $ 41,200

AND COST OF GOODS SOLD= COST OF GOODS AVAILABLE FOR SALE- ENDING INVENTORY

= $ 146,400-41,200

=$ 105,200

LIFO ENDING INVENTORY OF 3,900 INCLUDES 2,600 OF MARCH 1 AND 1,300(3,900-2600) FROM MARCH 5

= 2,600 * 7=18,200

=1,300*8=10,400

TOTAL =28,600

COST OF GOODS SOLD= $ 146,400- 28,600

= 117,800

AVERGAE COST = ENDING INVENTORY= 3,900 UNITS * 9.15= $ 35,685

COST OF GOODS SOLD = 12,100 UNITS * 9.15=$ 110,715