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Crane Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye.

Problem 8-6 (Part Level Submission) Crane Company is a multi product firm. Presented below is information concerning one of i

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Answer #1

1.computation of average cost per unit

Step1: cost of goods avaible for sale

=opening inventory +purchases made during the year

=(3100*18)+(4100*27)+(5100*35)

=345000

No of units avaible for sale: 3100+4100+5100

=12300

so average cost per unit =345000/12300 (cost of goods avaible for sale /no of units avaible for sale)

so answer =28.0487

a. perodic system Fifo cost flows

Under fifo system inventory purchased first are issued first

we can calculate cost of goods sold under fifo as under

Total units sold :4600+4300=8900

Units issued

Rate

cost of goods sold

3100

18

55800

(units *rate)

4100

27

110700

(units *rate)

1700

35

59500

(units *rate)

8900

226000

cost of goods sold

226000

Perpetual system Fifo cost flow
Goods purchased Cost of goods sold Inventory balance
date no of units cost per unit no of units sold cost per unit cost of goods sold no of units cost per units inventory balance
01-Jan 3100 18 @ 55800
02-Apr 4100 27 3100 18 @ 55800
Feb-20 3100 @ 18 55800 4100 27 @ 110700
1500 @ 27 40500 2600 27 @ 70200
04-Feb 5100 35 2600 27 @ 70200
5100 35 @ 178500
11-Apr 2600 @ 27 70200 3400 35 @ 119000
1700 @ 35 59500
Cost of goods sold 226000 119000
C. under Lifo cost flows inventories purchased last are issued first,
we can calculate cost of goods sold under LIFO as under
Total units sold :4600+4300=8900
Unit issued Rate cost of goods sold
5100 35 178500 (units *rate)
3800 27 102600 (units *rate)
8900 cost of goods sold 281100
perpetual system Lifo cash flows
Goods purchased Cost of goods sold Inventory balance
date no of units cost per unit no of units sold cost per unit cost of goods sold no of units cost per units inventory balance
01-Jan 3100 18 @ 55800
02-Apr 4100 27 3100 18 @ 55800
Feb-20 4100 @ 27 110700 4100 27 @ 110700
500 @ 18 9000 2600 18 @ 46800
04-Feb 5100 35 2600 18 @ 46800
5100 35 @ 178500
11-Apr 4300 @ 35 150500 800 35 @ 28000
2600 18 46800
Cost of goods sold 270200 (46800+28000) 74800

. E.perodic system weighted average cost flow .

Total units sold :4600+4300=8900

average cost per unit =28.0487

Cost of goods sold =8900*28.0487=249633.43

F. perpetual system weighted average cost flow.

Goods purchased Cost of goods sold Inventory balance
date no of units cost per unit no of units sold cost per unit cost of goods sold no of units cost per units inventory balance
01-Jan 3100 18 @ 55800
02-Apr 4100 27 3100 18 @ 55800
4100 27 @ 110700
Average 7200 (166500/7200) 23.125 166500
Feb-20 4600 @ 23.125 106375 2600 23.125 @ 60125
04-Feb 5100 35 2600 18 @ 46800
5100 35 @ 178500
Average 7700 (225300/7700) 29.26 225300
11-Apr 4300 @ 29.26 125818 3600 29.26 @ 105336
Cost of goods sold 232193 105336
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