Question

Express Distribution markets CDs of the performing artist Fishe. At the beginning of October, Express had in beginning inventory 5,840 of Fishe’s CDs with a unit cost of $6. During October, Express made the following purchases of Fishe’s CDs.

Oct. 3		7,300		@		$7		Oct. 19		8,760		@		$10
Oct. 9		10,220		@		$8		Oct. 25		11,680		@		$11

During October, 31,828 units were sold. Express uses a periodic inventory system.

Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 1,255.)

		FIFO		LIFO		AVERAGE-COST
The ending inventory		$		$		$
The cost of goods sold		$		$		$

Answer 1

	Units	Unit cost	Total
Beg. Inventory	5840	6	35040
Oct. 3	7300	7	51100
Oct. 9	10220	8	81760
Oct. 19	8760	10	87600
Oct. 25	11680	11	128480
Total	43800		383980
Average cost per unit	8.7667	=383980/43800
Ending inventory units	11972	=43800-31828
The ending inventory:
FIFO	131400	=(11680*11)+(11972-11680)*10
LIFO	77964	=(5840*6)+(11972-5840)*7
Average cost	104955	=11972*8.7667
The cost of goods sold:
FIFO	252580	=383980-131400
LIFO	306016	=383980-77964
Average cost	279025	=383980-104955