Question

Some of the information found on a detail inventory card for Tamarisk Inc. for the first month of operations is as follows.

		Received
Date		No. of Units		Unit Cost		Issued, No. of Units		Balance, No. of Units
January     2		1,300		$4.38				1,300
7						800		500
10		700		4.67				1,200
13						600		600
18		1,100		4.82		400		1,300
20						1,100		200
23		1,400		4.96				1,600
26						900		700
28		1,700		5.11				2,400
31						1,400		1,000

1a) Calculate average-cost per unit.

1b) From these data compute the ending inventory on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost.

1c) If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, would the amounts shown as ending inventory in (1), (2), and (3) above be the same? What amount would be shown as ending inventory?

Answer 1

Tamqoisk Inc. 1(a) Avg cost per unit $4.82 106) Ending Inventory FIFO LITO Aug cost. S51105 4380 $ 4820 LCC) FITO would the amount besame YES: Ending Inventor $ 5110 LITO No $ 4889 Aug cost No $5057 > Explanation : Dare unit unit cost ganz 1300 $4.38 Jan 10 700 $ 4.67 Jan 18 1100 & 4.82. Jan 23 1400 S 4.96 Jan 28 17005 .11 I total cost of goods available for sale Total cost $ 5694 3269 5302 6944 8 687 $29896 Ica) avg cost per unit $ 29896 1300+ 700 + 1100 + 1400 + 1700 $ 29896 6200 B4.82 Pes Unih

Ending units 4000 units 16 (U FI FO : 1000X & 5.11 $5110 (3) LIFO Loo0 X $ 4.38 $ 4380 (3) Aug costp.u= 1OOO X $ 4.82 $ 4820 ICC) O FIFO = 1000 X 5.11 - $ 5110 (2) LIFO gan 2 Jan 23 Jan 28 : 200 unit X : 500 unit X 300 unit X $4.38 = $876) $4.96 = 2480 $ 5.11 = 1533 94889 e Avg

(3) AUG cost per unit: Jana Jont Jonzo Aug cost can 13 Jan 18 | Aug cost Jan 18 Jan 2o. han23 Purchase costof Grood sold Ending Inventory cost TOTOY cost Total cost Torch unit P.U cost unit PU cost unit PU cost 1300 4.38 5694 1300 4.38 5694 800 $4.38 35041 500 4.38 2190 700 4.67 32691 500 4.38 2190 700 4.67 3269 11200 4.5492 5459 600 4.54922730 600 45492 2729 1100 4.82 5302 600 4.5492 2729 11100 4.82 5302 1700 4.7241 803) 400 4.724) 1890 1300 4.7241 614) | 1100 4.7241 5197 200 4.7241 5944 1400 4.96 6944 200 4.724 5944 1900 4.96 6944 1600 493 7888 900 4.93 4437 700 4.93 3451 1700 5.11 8687 1700 4.93 3451 1700 5.11 8687 2 400 5.0575 12138 1400 5.0575 7081 1000 sost 5057 Aug cost Jan 26 Jan 28 Augcost Jan 31