Question

Headland Company is a multi product firm. Presented below is Information concerning one of its products, the Hawkeye. Date Transaction Quantity Price/Cost 1/1 Beginning inventory 2,000 $15 2/4 Purchase 3,000 2/20 Sale 3,500 4/2 Purchase 4,000 11/4 Sale 3,200 23 Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.) Average-cost per units LINK TO TEXT Compute cost of goods sold, assuming Head and uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to a Cost of goods sold (a) Periodic system, FIFO cost flow (b) Perpetual system, FIFO cost flow (c) Periodic system, LIFO cost flow (d) Perpetual system, LIFO cost flow (@) Periodic system, weighted-average cost flow () Perpetual system, moving average cost flow

Answer 1

Available for sale Ans. Total Date Units Rate $15.00 $30,000 $69,000 $116,000 1-Jan 2000 $23.00 4-Feb 3000 $29.00 2-Apr 4000 $215,000 Cost of goods available for sale 9000 Average cost per unit Total cost of goods available for sale / Total units available $215,000 9,000 $23.8889 per unit Units sold (3,500 3,200) 6,700 units

Periodic FIFO: Ans. A Total Date Units Rate $15.00 $30,000 $69,000 $49,300 2000 1-Jan $23.00 4-Feb 3000 $29.00 2-Apr 1700 $148,300 Cost of goods sold 6700

Ans. B Perpetual FIFO: Purchase Cost of goods sold Balance Total cost Total cost Total cost Quantity Date Rate Quantity Rate Quantity Rate $30,000 $30,000 $69,000 $15.00 $30,000 $15.00 1-Jan 2000 2000 $23.00 $69,000 $15.00 4-Feb 3000 2000 $23.00 3000 $15.00 20-Feb $30,000 2000 $23.00 $34,500 $23.00 $34,500 $34,500 $116,000 1500 1500 2-Apr $29.00 $116,000 $23.00 4000 1500 $29.00 4000 $34,500 $23.00 4-Nov 1500 $29.00 $49,300 $26.00 $39,000 1700 1500 $148,300 $39,000 Total Cost of goods sold Ending inventory *In FIFO method the units that have purchased first, are released the first one and the ending inventory units remain from the last purchases.

Periodic LIFO: Total Ans. C Date Units Rate $29.00 $116,000 $62,100 2-Apr 4000 4-Feb $23.00 2700 $178,100 Cost of goods sold 6700 Ans. D Perpetual LIFOO: Purchase Cost of goods sold Balance Total cost Total cost Quantity Total cost Date Rate Quantity Rate Quantity Rate $15.00 $30,000 $69,000 $15.00 $30,000 $30,000 $69,000 1-Jan 2000 2000 $23.00 $15.00 4-Feb 3000 2000 $23.00 3000 $23.00 $69,000 20-Feb 3000 $22,500 $22,500 $15.00 $7,500 $15.00 500 1500 $15.00 $29.00 $116,000 2-Apr 4000 1500 $116,000 $22,500 $23,200 $45,700 $29.00 4000 $92,800 $29.00 $15.00 4-Nov 3200 1500 $29.00 800 $169,300 Total Cost of goods sold Ending inventory In LIFO method the units that have purchased last, are released the first one and ending inventory units remains from the first purchase.

Periodic Weighted Average: Ans. E Cost of goods sold No. of units sold* Average cost per unit 6,700 $23.8889 $160,056 Perpetual Weighted average: Ans, F Purchase Cost of goods sold Balance Total cost Total cost Total cost Quantity Quantity Rate Date Rate Rate Quantity $15.00 $30,000 $30,000 $69,000 2000 $15.00 1-Jan 2000 $23.00 5000 $19.8000 $99,000 $29,700 4-Feb 3000 $19.8000 $69,300 $19.8000 20-Feb 3500 1500 $29.00 $116,000 $26.4909 $145,700 2-Apr 5500 4000 $26.4909 $84,771 $26.4909 $60,929 4-Nov 3200 2300 Cost of goods sold $154,071 Ending inventory $60,929 Total Average cost per unit on Purchase date (Cost of balance + Cost of purchase)/(Units of balance Units of purchase) Average cost per unit on Sales date (Cost of balance Cost of sales)/ (Units of balance Units of sales)