Question

Exercise 5-3A Allocating product cost between cost of goods sold and ending inventory: multiple purchases LO 5-1 Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 100 units at $45 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 174-unit purchase at $51 per unit; the second was a 212-unit purchase at $54 per unit. During the period, it sold 294 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses

Answer 1

The answer has been presented to the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Answer 3 Firstly we have to calculate the units in ending inventory = beginning inventory+ purchases- units sold 4 = 100 + 174 + 212-294 = 192 Units 8 Ending Inventory 9 FIFO Ending Inventory 10368 Unit Cost Units 10 From Beginning inventory 192 @ 54 = 11 12 Ending Inventory Ending Inventory Units Unit Cost 13 LIFO 14 From Beginning inventory 100 @ 45 = 4500 15 From First Purchases 92 @ 51 = 4692 16 Total ending inventory 9192 192 96 17