Question

The units of Manganese Plus available for sale during the year were as follows:

Mar. 1	Inventory	20 units	@ $30	$600
June 16	Purchase	27 units	@ $35	945
Nov. 28	Purchase	42 units	@ $39	1,638
		89 units		$3,183

There are 10 units of the product in the physical inventory at November 30. The periodic inventory system is used. Round answers to the nearest whole dollar.

a. Determine the inventory cost by the FIFO method.
$

b. Determine the inventory cost by the LIFO method.
$

c. Determine the inventory cost by the average cost methods

Answer 1

Ans. A	Ending inventory units = 10 units
	Periodic FIFO:
	Date	Units	Rate	Total
	28-Nov	10	$39.00	$390
	Ending inventory	10		$390
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. B	Periodic LIFO:
	Date	Units	Rate	Total
	01-Mar	10	$30.00	$300
	Ending inventory	10		$300
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.
Ans. C	Weighted average cost:
	Number of goods available for sale   = 89   units
	Cost of goods available for sale   = $3,183
	Average cost per unit =   Total cost of goods available for sale / Total units available
	$3,183 / 89
	$35.76 per unit	(rounded)
	Ending inventory =   Average cost per unit * Ending inventory units
	$35.76 * 10
	$358	(rounded)