Question

Oriole Company had a beginning inventory of 115 units of Product RST at a cost of $7 per unit. During the year, purchases were: Feb. 20 660 units at $8 Aug. 12 430 units at $10 May 5 520 units at $9 Dec. 8 115 units at $11 Oriole uses a periodic inventory system. Sales totaled 1,600 units. Determine the cost of goods available for sale. The cost of goods available for sale $ Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.) Average Cost $

Answer 1

Statement showing Computations
Date	Particulars	Units	Cost	Amount
Jan 01	Beginning Inventory	115.00	7.00	805.00
Feb -20	Purchase	660.00	8.00	5,280.00
May 05	Purchase	520.00	9.00	4,680.00
Aug 12	Purchase	430.00	10.00	4,300.00
Dec 08	Purchase	115.00	11.00	1,265.00
	Cost of goods available for sale	1,840.00	8.875	16,330.00
Cost of goods available for sale	16,330.00
Average Cost	8.875
	FIFO
The ending inventory = 125*10+115*11	2,515.00
The cost of goods sold = 115*7+660*8+520*9+305*10	13,815.00
	LIFO
The ending inventory = 115*7+125*8	1,805.00
The cost of goods sold = 115*11+430*10+520*9+535*8	14,525.00
	Average Cost
The ending inventory = 240*8.875	2,130.00
The cost of goods sold = 1600*8.875	14,200.00
LIFO results in lowest inventory for balance sheet
FIFO results in lowest COGS for income statement