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Correct Answer:
Requirement 1: Average cost per unit = $ 6.35
Weighted Average Cost Per unit |
|||
Units |
(A) |
9010 |
|
Total Cost |
(B) |
$ 57,213.50 |
|
Average Cost |
(C=B/A) |
$ 6.35 |
Requirement 2:
LIFO |
Weighted Average |
|
Ending Inventory |
$ 7,154 |
$ 7,557 |
Working:
Periodic LIFO |
||||||
A |
Total Units Available for sale |
9010 |
$ 57,213.50 |
|||
Units Sold |
7820 |
|||||
Ending Inventory Units |
1190 |
|||||
Valuation |
||||||
Cost of Goods Sold |
850 |
$ 6.79 |
5,771.50 |
|||
1190 |
$ 6.60 |
7,854.00 |
||||
2040 |
$ 6.50 |
13,260.00 |
||||
1360.00 |
$ 6.40 |
8,704.00 |
||||
2380.00 |
$ 6.08 |
14,470.40 |
||||
- |
||||||
B |
Cost of Goods Sold |
7820 |
units |
$ 50,059.90 |
||
A-B |
Ending Inventory |
1190 |
units |
$ 7,153.60 |
Weighted Average |
||||||
A |
Total Units Available for sale |
9010 |
$ 57,213.50 |
|||
Units Sold |
7820 |
|||||
Ending Inventory Units |
1190 |
|||||
Valuation |
||||||
Cost of Goods Sold |
7820 |
$ 6.3500 |
$ 49,657.00 |
|||
B |
Cost of Goods Sold |
7820 |
units |
$ 49,657 |
||
A-B |
Ending Inventory |
1190 |
units |
$ 7,557 |
Requirement 3:
FIFO |
LIFO |
|
Ending Inventory |
$ 8,016 |
$ 10,001 |
Working:
Perpetua; FIFO |
||||||
A |
Total Units Available for sale |
9010 |
$ 57,213.50 |
|||
Units Sold |
7820 |
|||||
Ending Inventory Units |
1190 |
|||||
Valuation |
||||||
Cost of Goods Sold |
1020 |
$ 6.00 |
$ 6,120.00 |
|||
2550 |
$ 6.08 |
$ 15,504.00 |
||||
1360 |
$ 6.40 |
$ 8,704.00 |
||||
2040 |
$ 6.50 |
$ 13,260.00 |
||||
850 |
$ 6.60 |
$ 5,610.00 |
||||
B |
Cost of Goods Sold |
7820 |
units |
$ 49,198.00 |
||
A-B |
Ending Inventory |
1190 |
units |
$ 8,015.50 |
LIFO |
||||||
A |
Total Units Available for sale |
9010 |
$ 57,213.50 |
|||
Units Sold |
7820 |
|||||
Ending Inventory Units |
1190 |
|||||
Valuation |
||||||
Cost of Goods Sold |
850 |
$ 6.00 |
5,100.00 |
|||
2380 |
$ 6.08 |
14,470.40 |
||||
1020 |
$ 6.40 |
6,528.00 |
||||
2040.00 |
$ 6.50 |
13,260.00 |
||||
1190.00 |
$ 6.60 |
7,854.00 |
||||
340.00 |
$ 6.40 |
2,176.00 |
||||
B |
Cost of Goods Sold |
7820 |
units |
$ 47,212.40 |
||
A-B |
Ending Inventory |
1190 |
units |
$ 10,001.10 |
Requirement 4:
FIFO |
|
Cost of Goods Sold |
$ 49,198 |
Note: FIFO inventory system under Periodic and perpetual remains the same, viz cost of goods sold and ending inventory do not changes.
Requirement 5:
In an inflationary situation FIFO inventory system will show the highest net income.
End of answer.
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