Question

Inventory Costing Methods-Perpetual Method
Merritt Company uses the perpetual inventory system. The following May data are for an item in Merritt's inventory:

May	1	Beginning inventory	170	unit@	$32	per unit
	12	Purchased	120	unit@	$37	per unit
	16	sold	190	unit@
	24	Purchased	180	unit@	$38	per unit

Calculate the cost of goods sold for the May 16 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:
	cost of goods sold:	$.
B	Last-in, first-out:
	cost of goods sold	$
C	Weighted-average cost:
	cost of goods sold:	$

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

2 A Answer 3 Part A) First in First Out 4 Cost of goods sold = units sold* cost per unit 5 =(170*32)+(20*37) 6 = $ 6180 8 Part B) Last in First Out 9 Cost of goods sold = units sold* cost per unit 10 =(120*37)+(70*32) 11 = $6680 13 Part C) Weighted average cost 14 Cost of goods sold = unit sold * averae cost 15 = 190*(((170*32)+(120*37))/(170+120)) 16 = $ 6473 (rounded off to nearest dollar 17 L8 Thus the final answer 20 A 6,180 22 B 23 24 C FIFO Cost of goods sold LIFO Cost of goods sold Weighted Average Cost Cost of goods sold Sheet51 Sheet52 Sheet53 6,680 6,473 Sheet55 Sheet56 Sheet54 Sheets