Question

Required information Exercise 5-4A (Algo) Effect of inventory cost flow (FIFO, LIFO, and weighted average) on gross margin LO 5-1 [The following information applies to the questions displayed below.) The following information pertains to Mason Company for Year 2: Beginning inventory Units purchased 112 units @ $ 28 350 units @ $ 42 Ending inventory consisted of 40 units. Mason sold 422 units at $84 each. All purchases and sales were made with cash. Operating expenses amounted to $3,300. Exercise 5-4A (Algo) Part c c. Compute the amount of ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.) Answer is not complete. Ending Inventory FIFO 13,020 X LIFO $ 2,016 Weighted average

Answer 1

ANSWER

FIFO

ENDING INVENTORY = 40 UNITS * $42 = $1,680

LIFO

ENDING INVENTORY = 40 UNITS * $28 = $1,120

WEIGHTED AVERAGE

WEIGHTED AVERAGE RATE PER UNIT = (112 UNITS * $28) + (350 UNITS * $42) / 112 UNITS + 350 UNITS

= $38.606 PER UNIT

ENDING INVENTORY = 40 UNITS * $38.606 = $1,544