Question

Exercise 8-11 Sheffleld Company's record of transactions for the month of April was as follows. Purchases Sales 605@ $10.00 April 1 (balance on hand) 726 @ $6.00 April 3 9 1,694 @ 10.00 1,815 @ 6.08 968@ 6.40 726 11.00 8 11 1,452 6.60 23 1,[email protected] 13 847 6.80 27 1,089@ 12.00 21 5,566 605@ 7.00 29 6,413 Assuming that periodic inventory records are kept in units only, calculate the average-cost per unit. (Round answer to 2 decim Average-cost per unit per unit Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using LIFO and average-cost. LIFO $ Average-cost $

Answer 1

Average cost per unit = Total cost of goods available/Total goods available

= 41164.2/6413

= $6.42 per unit

Number of units in ending inventory = 6413-5566 = 847 units

LIFO method states that Inventory purchased later will be sold first

Ending Inventory = 726*6 + 121*6.08

= $5091.68

Average cost = 847*6.42 = $5437.74