Question

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	17 units at $49
Feb. 17	Purchase	11 units at $50
Jul. 21	Purchase	17 units at $52
Nov. 23	Purchase	7 units at $53

There are 16 units of the item in the physical inventory at December 31. The periodic inventory system is used. Round average unit cost to the nearest cent and final answers to the nearest whole dollar, if required.

a. Determine the inventory cost by the first-in, first-outmethod.
$

b. Determine the inventory cost by the last-in, first-outmethod.
$

c. Determine the inventory cost by the weighted average costmethod.
$

Answer 1

(a) first-in, first out method ? 1 Inventory cost = ( 7 units x $53) + ((16 units - tunits) & $52] =(Funits X $53) + (9 units X $52) = $371 + $468 = $839 b Last-in, first out method: Inventory cost = 16 units & $49 = $ 784 $371 ☺) Weighted average cost method: Cost of merchandise available for sale: 17 units X $49 $833 11 units X $50 $ 55o 17 units x $52 $ 884 7 units & $53 Total 52 units $2,638 unit Average in cost = Total cost ₃ Total units = $2,638 52 units = $ 0.731 Now, Inventory cost = 16 units x $50.731 - $ 81169 or $812