Question

Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 240 units at $50 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 300-unit purchase at $55 per unit; the second was a 385-unit purchase at $57 per unit. During the period, it sold 570 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses a. FIFO. b. LIFO. c. Weighted average. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) FIFO LIFO Cost of goods sold Ending inventory | $ 30,210 $ 20,235 Weighted Average $ 31,085 $ 19,360

Answer 1

	FIFO	LIFO	Weighted Average
Cost of Goods Sold	$                 30,210	$           32,120	$            31,085
Ending Inventory	$                 20,235	$           18,325	$            19,360

.Working

	Units	Cost per unit	value
Beginning Balance	240	$                   50.00	$ 12,000
Purchases
	300	$                   55.00	$ 16,500
	385	$                   57.00	$ 21,945
Total	925		$ 50,445

.

Average Cost of Inventory
Units	(A)	925
Total Cost	(B)	$ 50,445
Average Cost	(C=B/A)	$                   54.54

.

FIFO
Total Units Available for sale		925
Units Sold		570
Closing Stock in Units		355
Valuation
Ending Inventory	355	@	$             57.00	$ 20,235
	0	@	$           146.00	$ 0
Value Of Ending Inventory				$            20,235
Cost of Goods sold				$            30,210
LIFO
Total Units Available for sale		925
Units Sold		570
Closing Stock in Units		355
Valuation
Ending Inventory	240	@	$             50.00	$ 12,000
	115	@	$             55.00	$ 6,325
Value Of Ending Inventory				$            18,325
Cost of Goods sold				$            32,120
Weighted Average method
Total Units Available for sale		925
Units Sold		570
Closing Stock in Units		355
Valuation
Ending Inventory	355	@	$           54.535	$            19,360
Value Of Ending Inventory				$            19,360
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$            31,085