Question

Consider the following information for Maynor Company, which uses a periodic inventory system: Transaction Beginning Inventory Purchase Purchase Purchase Units 16 26 Unit Cost $66 72 Total Cost $1,056 1,872 January 1 March 28 August 22 October 14 32 76 2,432 82 3,034 Goods Available for Sale $8,394 The company sold 37 units on May 1 and 32 units on October 28. Required: Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods. (Round the per unit cost to two decimal places and then round your answer to the nearest whole dollar.) a. FIFO: Ending Inventory Cost of Goods Sold b. LIFO: Ending Inventory Cost of Goods Sold

Answer 1

Answer-

(a) FIFO

Ending inventory =$3,414

Cost of goods sold=$4,980

Working:

cost of goods sold = 16 x $66 +26 x $72+ 27x $76

=$4,980

Ending inventory= 5x $76+ 37x $82 =$3,414

(b) LIFO

Ending inventory=$3,172

Cost of goods sold=$5,222

Working:

Cost of goods sold= 26x$72+ 11x$66+ 32x $82

=$5,222

Ending inventory= 5x$66 + 32x$76 +5x$82 =$3,172

(C) weighted average

Ending inventory=$3,176

Cost of goods sold=$5,218

  

Working:

Cost of goods sold= 37x 75.62 + 32x 75.62= $5,218

Ending inventory= 42x 75.62= $3,176