Question

Question 2 View Policies Current Attempt in Progress You have the following information for Kingbird, Inc. for the month ended October 31, 2022. Kingbird uses a periodic method for inventory. Date Description Units Unit Cost or Selling Price Oct. 1 Beginning inventory Oct. 9 Purchase Oct. 11 Sale Oct. 17 Purchase Oct. 22 Sale Oct. 25 Purchase Oct. 29 Sale Calculate the weighted average cost. (Round answer to 3 decimal places, e.g. 5.125.)

Answer 1

Answer:

Beginning Inventory = 55 Units
Cost of Beginning Inventory = 55 * $22 = $1,210

Cost of Purchases = (120 * $24) + (90 * $25) + (65 * $27)
Cost of Purchases = $2,880 + $2,250 + $1,755
Cost of Purchases = $6,885

Cost of Goods available for Sale = Cost of Beginning Inventory + Cost of Purchases
Cost of Goods available for Sale = $1,210 + $6,885
Cost of Goods available for Sale = $8,095

Units available for Sale = 55 + 120 + 90 + 65
Units available for Sale = 330 Units

Units Sold = 90 + 55 + 100 = 245 Units

Sales Revenue = (90 * $45) + (55 * $50) + (100 * $50)
Sales Revenue = $4,050 + $2,750 + $5,000
Sales Revenue = $11,800

LIFO Method:
Cost of Goods Sold = (65 * $27) + (90 * $25) + (90 * 24)
Cost of Goods Sold = $1,755 + $2,250 + $2,160
Cost of Goods Sold = $6,165

Ending Inventory = Cost of Goods available for Sale - Cost of Goods Sold
Ending Inventory = $8,095 - $6,165
Ending Inventory = $1,930

Gross Profit = Sales Revenue – Cost of Goods sold
Gross Profit = $11,800 - $6,165
Gross Profit = $5,635

FIFO Method:
Cost of Goods Sold = (55 * $22) + (120 * $24) + (70 * 25)
Cost of Goods Sold = $1,210 + $2,880 + $1,750
Cost of Goods Sold = $5,840

Ending Inventory = Cost of Goods available for Sale - Cost of Goods Sold
Ending Inventory = $8,095 - $5,840
Ending Inventory = $2,255

Gross Profit = Sales Revenue – Cost of Goods sold
Gross Profit = $11,800 - $5,840
Gross Profit = $5,960

Average Cost Method:
Weighted Average Cost per unit = Cost of Goods available for Sale / Units available for Sale
Weighted Average Cost per unit = $8,095 / 330
Weighted Average Cost per unit = $24.530

Cost of Goods Sold = Units Sold * Weighted Average Cost per unit
Cost of Goods Sold = 245 * $24.530
Cost of Goods Sold = $6,010

Ending Inventory = Cost of Goods available for Sale - Cost of Goods Sold
Ending Inventory = $8,095 - $6,010
Ending Inventory = $2,085

Gross Profit = Sales Revenue – Cost of Goods sold
Gross Profit = $11,800 - $6,010
Gross Profit = $5,790