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