Question

Rogers Products uses a periodic inventory system. The company's records show the beginning inventory of PH4 oil filters on January 1 and the purchases of this item during the current year to be as follows: Jan. 1 Beginning inventory 14 units @ $3.00 $ 42.00 Feb. 23 Purchase 14 units @ $3.50 $49.00 Apr. 20 Purchase 34 units @ $3.80 $129.20 May 4 Purchase 45 units @ $4.00 $180.00 Nov. 30 Purchase 19 units @ $5.00 $95.00 Totals 126 units $ 495.20 A physical count indicates 23 units in inventory at year-end. Determine the cost of the ending inventory on the basis of each of the following methods of inventory valuation. (Remember to use periodic inventory costing procedures.) a. Average cost. b. FIFO. c. LIFO.

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet. For detailed answer refer to the supporting sheet.

Answer Parta) Cost of ending inventory under Average Cost = Number of units in ending inventory * Average cost per unit = 23 * (495.2/126) = $ 90.39 "Thus the cost of ending inventory under average cost = $ 90.39 - Part b) Cost of ending inventory under FIFO 1 = Number of units in ending inventory * Cost as per FIFO 2 = (19*5)+(484) 3 = 95+16 + = $ 111 5 Thus the cost of ending inventory under FIFO = $ 111 7 Part C) 3 Cost of ending inventory under LIFO ? = Number of units in ending inventory * Cost as per LIFO b = ( 14*3)+(9*3.5) 1 = 42+ 31.5 2 = $ 73.5 3 Thus the cost of ending inventory under LIFO = $ 73.5