Oahu Kiki tracks the number of units purchased and sold throughout each accounti
ID: 1170817 • Letter: O
Question
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 290 units.
Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 290 units.
Explanation / Answer
1. The total number of units available for sale = 140+330 +250 = 720 units
Cost of goods available for sale = 11200 + 29700 +27500 = 68400
2. Number of ending inventory = Total units available for sale - No of units sold = 720 - 290 = 430
3. a) FIFO First Jan 1 inventory will be sold = 140 @ $80 = 140 * 80 = 11200
Jan 15 inventory sold = (Total units sold - Inventory sold on Jan1 ) * 90 = (290-140)*90 = 150*90= 13500
Total Cost of Goods sold = 11200 + 13500 = 24700
Cost of Ending Inventory = Total Cost of Goods Available for sale - Total Cost of Goods Sold as per FIFO = 68400-24700 = 43700
( b) LIFO : First Jan 24 inventory will be sold = 250 @ $110 = 250 * 110 = 27500
Jan 15 inventory sold = (Total units sold - Inventory sold on Jan24 ) * 90 = (290-250)*90 = 40*90 = 3600
Total Cost of Goods sold = 27500 + 3600 = 31100
Cost of Ending Inventory = Total Cost of Goods Available for sale - Total Cost of Goods Sold as per FIFO = 68400-31100 = 37300
c) Weighted Average cost Method:
Weighted Average cost = Cost of Goods Available for Sales/ Total Units available for sale = 68400/720 = 95
Cost of goods sold = 290 * 95 = 27500
Cost of ending Inventory = Total Cogs available for sale - Cost of Goods sold = 68400 - 27500 = 40900
Best of Luck. God Bless
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.