Bg Sammies Sales, Inc. had the acquisition schedule below in December. During th
ID: 2339245 • Letter: B
Question
Bg Sammies Sales, Inc. had the acquisition schedule below in December. During the month of december the company sold 3000 units.
Units Purchased Units cost $
REQUIRED: Assuming Big Sammies Sales, Inc. uses a periodic inventory system, calculate the amount of ending inventory under each of the following pricing methods: first-in, first-out; last-in, first-out; and weighted average. (Hint: calculate the Ending Inventory)
dec. 3- 900 units $50 dec. 8 1200 units $56 dec.19 1500 units $60 dec. 23 1000 units $62Explanation / Answer
in the case of First in first out pricing method ending inventory will be:
Total purchase= 900+1200+1500+1000= 4600 unit
sale during december= 3000 unit
closing inventory= 1600 unit
and value will be calculated as follows:
Dec 23 Purchease -1000 unit *$62= $62000
Dec 19 purchase- 600 unit*$60= $36000
Total amount= $98000
In case Last in first out pricing method:
Dec 3 purchase- 900*50= $45000
Dec 8 purchase= 700*56= $39200
Total value= $84200
Under weighted Average cost method:
Total cost of inventory purchased during the month = (900*50)+(1200*56)+(1500*60)+(1000*62)=$264200
Total unit purchased during the month= 4600 unit
Weighted Avg cost= $57.43 i.e. $264200/4600
Value of closing inventory= 1600 unit*57.43= $91888
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