Question

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

200

units

@ $53.00 per unit

Mar.

5

Purchase

275

units

@ $58.00 per unit

Mar.

9

Sales

360

units

@ $88.00 per unit

Mar.

18

Purchase

135

units

@ $63.00 per unit

Mar.

25

Purchase

250

units

@ $65.00 per unit

Mar.

29

Sales

230

units

@ $98.00 per unit

Totals

860

units

590

units

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 115 units from beginning inventory and 245 units from the March 5 purchase; the March 29 sale consisted of 95 units from the March 18 purchase and 135 units from the March 25 purchase.

Answer 1

Answer a.

Cost of Ending Inventory = $17,510

Answer b.

Cost of Ending Inventory = $15,900

Answer c.

Cost of Ending Inventory = $16,840

Answer d.

Cost of Ending Inventory = $17,050