Question

2. During May, the following changes in inventory took place: SHOW ALL CALCULATIONS 1,100 units @ S25 S2 7,500 800 units@$3628,800 24 Purchases 700 units@$30 21,000 May 1 Balance 14 Purchases May 8 Sold 19 Sold 29 Sold 500 units@$50 300 units @ $49 600 units@ $54 A physical count indicates that 1,200 units are on hand on May 31. The company uses the PERPETUAL method. umin a. (1). LIFO (2). FIFO b. What is the moving average cost per unit of ending inventory? (Round to the nearest penny) Assuming that the company uses the PERIODIC method rather than the perpetual, determine each of the following: a. a. Ending inventory under LIFO b. Cost of Goods Sold under FIFO Weighted Average cost per unit for the month c.

Answer 1

a. Cost of goods sold assuming LIFO will be $ 41,300 as shown below:

LIFO-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
May-01									1,100		25.00	27,500
Balance									1,100			27,500
May-08					500		25	12,500	600		25.00	15,000
Balance									600			15,000
May-14	800		36	28800					600		25.00	15,000
									800		36	28,800
Balance									1,400			43,800
May-19					300		36	10,800	600		25.00	15,000
									500		36	18,000
Balance									1,100			33,000
May-24	700		30	21,000					600		25.00	15,000
									500		36	18,000
									700		30	21,000
Balance									1,800			54,000
May-29					600		30	18000	600		25.00	15,000
									500		36	18,000
									100		30	3,000
Balance									1,200			36,000
Ending Inventory									1,200			36,000
Cost of goods sold					1,400			41,300

2) Cost of goods sold assuming FIFO will be $38,300

FIFO-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
May-01									1,100		25.00	27,500
Balance									1,100			27,500
May-08					500		25	12,500	600		25.00	15,000
Balance									600			15,000
May-14	800		36	28800					600		25.00	15,000
									800		36	28,800
Balance									1,400			43,800
May-19					300		25	7,500	300		25.00	7,500
									800		36	28,800
Balance									1,100			36,300
May-24	700		30	21,000					300		25.00	7,500
									800		36	28,800
									700		30	21,000
Balance									1,800			57,300
May-29					300		25	7500
					300		36	10800	500		36	18,000
									700		30	21,000
Balance									1,200			39,000
Ending Inventory									1,200			39,000
Cost of goods sold					1,400			38,300

b. Moving average cost per unit is :

Moving average-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
May-01									1,100		25	27,500
Balance									1,100		25	27,500
May-08					500		25	12,500	600		25	15,000
Balance									600		25	15,000
May-14	800		36	28,800					600		25	15,000
									800		36	28,800
Balance									1,400		31	43,800
May-19					300		31	9,386	1,100		31	34,414
Balance									1,100			34,414
May-24	700		30	21,000					1,100		31	34,414
									700		30	21,000
Balance									1,800		31	55,414
May-29					600		31	18,471	1,200		31	36,943
Balance									1,200			36,943
Ending Inventory									1,200			36,943
Cost of goods sold					1,400			40,357

Assuming Periodic method:

Ending inventory under LIFO is $ 31,100

LIFO-Periodic
Date	Cost of goods available for sale				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Beginning Inventory	1,100		25	27,500					1,100		25	27,500
Purchases:
May 14	800		36	28,800	700		36	25,200	100		36	3,600
May 24	700		30	21,000	700		30	21,000
Total	2,600			77,300	1,400			46,200	1,200			31,100

Cost of goods sold under FIFO is $ 38,300

FIFO-Periodic
Date	Cost of goods available for sale				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Beginning Inventory	1,100		25	27,500	1,100		25	27,500
Purchases:
May 14	800		36	28,800	300		36	10,800	500		36	18,000
May 24	700		30	21,000					700		30	21,000
Total	2,600			77,300	1,400			38,300	1,200			39,000

Average cost per unit under weighted average is:

Weighted Average-Periodic
Date	Cost of goods available for sale
	Units	@	Cost per unit	Cost of purchase
Beginning Inventory	1,100		25	27,500
Purchases:
May 14	800		36	28,800
May 24	700		30	21,000
Total	2,600		30	77,300