Question

Riverbed Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye.

Date		Transaction		Quantity		Price/Cost
1/1		Beginning inventory		3,200		$18
2/4		Purchase		4,200		27
2/20		Sale		4,700		46
4/2		Purchase		5,200		35
11/4		Sale		4,400		50

1.

Compute cost of goods sold, assuming Riverbed uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.)

				Cost of goods sold
(a)		Periodic system, FIFO cost flow		$
(b)		Perpetual system, FIFO cost flow		$
(c)		Periodic system, LIFO cost flow		$
(d)		Perpetual system, LIFO cost flow		$
(e)		Periodic system, weighted-average cost flow		$
(f)		Perpetual system, moving-average cost flow		$

Please show all work.

Answer 1

ANSWER

Cost of goods available for sale = (3200 * $18) + (4200*$27) + (5200*$35) = $353,000

Total quantity available for sale = 3200 + 4200 +5200 = 12600

Average cost per unit = Cost of goods available for sale / Nos of units available for sale

= $353,000 / 12600 = $28.02 per unit

Solution a:

Cost of goods available for sale = (3200 * $18) + (4200*$27) + (5200*$35) = $353,000

Quantity in ending inventory = 3200 + 4200 +5200 - 4700 - 4400 = 3500

In FIFO ending inventory will consist of purchase from 4/2

Hence value of ending inventory = 3500 * $35 = $122,500

Cost of goods sold = Cost of goods available for sale - Value of ending inventory

= $353,000 - $122,500 = $230,500

Solution b:

Computation of ending inventory COGS under FIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1/1	3200	$18.00	$57,600.00	0	$0.00	$0.00	0	$0.00	$0.00	3200	$18.00	$57,600.00
2/4	3200	$18.00	$57,600.00	4200	$27.00	$113,400.00	0	$0.00	$0.00	3200	$18.00	$57,600.00
										4200	$27.00	$113,400.00
2/20	3200	$18.00	$57,600.00	0	$0.00	$0.00	3200	$18.00	$57,600.00	2700	$27.00	$72,900.00
	4200	$27.00	$113,400.00				1500	$27.00	$40,500.00
4/2	2700	$27.00	$72,900.00	5200	$35.00	$182,000.00	0	$0.00	$0.00	2700	$27.00	$72,900.00
										5200	$35.00	$182,000.00
11/4	2700	$27.00	$72,900.00	0	$0.00	$0.00	2700	$27.00	$72,900.00	3500	$35.00	$122,500.00
	5200	$35.00	$182,000.00				1700	$35.00	$59,500.00
Total									$230,500.00			$122,500.00

Solution c:

Under LIFO ending inventory will consist of 3200 units from begining inventory and 300 units from 2/4 purchase

Cost of ending inventory = (3200*$18) + (300*$27) = $65,700

Cost of goods sold = $353,000 - $65,700 = $287,300

Solution d:

Computation of ending inventory COGS under LIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1/1	3200	$18.00	$57,600.00	0	$0.00	$0.00	0	$0.00	$0.00	3200	$18.00	$57,600.00
2/4	3200	$18.00	$57,600.00	4200	$27.00	$113,400.00	0	$0.00	$0.00	3200	$18.00	$57,600.00
										4200	$27.00	$113,400.00
2/20	3200	$18.00	$57,600.00	0	$0.00	$0.00	4200	$27.00	$113,400.00	2700	$18.00	$48,600.00
	4200	$27.00	$113,400.00				500	$18.00	$9,000.00
4/2	2700	$18.00	$48,600.00	5200	$35.00	$182,000.00	0	$0.00	$0.00	2700	$18.00	$48,600.00
										5200	$35.00	$182,000.00
11/4	2700	$18.00	$48,600.00	0	$0.00	$0.00	4400	$35.00	$154,000.00	2700	$18.00	$48,600.00
	5200	$35.00	$182,000.00							800	$35.00	$28,000.00
Total									$276,400.00			$76,600.00

Solution e:

Weighted average cost per unit = Cost of goods available for sale / Nos of units avaiable for sale

= $353,000 / 12600 = $28.02 per unit

Cost of ending inventory using Weighted average = 3500 * $28.02 = $98,056

Cost of goods sold =$353,000 - $98,056 = $254,944

Solution f:

Computation of ending inventory COGS under Weighted Average Cost
Date	Opening Stock			Receiving			Issue			Closing Stock
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1/1	3200	$18.00	$57,600.00	0	$0.00	$0.00	0	$0.00	$0.00	3200	$18.00	$57,600.00
2/4	3200	$18.00	$57,600.00	4200	$27.00	$113,400.00	0	$0.00	$0	7400	$23.11	$171,000
2/20	7400	$23.11	$171,000	0	$0.00	$0	4700	$23.11	$108,608	2700	$23.11	$62,392
4/2	2700	$23.11	$62,392	5200	$35.00	$182,000	0	$0.00	$0	7900	$30.94	$244,392
11/4	7900	$30.94	$244,392	0	$0.00	$0	4400	$30.94	$136,117	3500	$30.94	$108,275
Total									$244,725			$108,275

_____________________________________________

If you have any query or any Explanation please ask me in the comment box, i am here to helps you.please give me positive rating.

*****************THANK YOU**************