3. Use the following information to calculate ending inventory on (a) a LIFO bas

Question

3. Use the following information to calculate ending inventory on (a) a LIFO basis, (b) a FIFO basis, and (c) an average-cost basis.  Assume a perpetual inventory system.

            May   l   Beginning inventory         70 units @ $14

                      9  Purchases                        30 units @ $16

                    17  Sales                                25 units

                    22  Purchases                        15 units @ $18

                    27  Sales                                40 units     

Explanation / Answer

a) LIFO End Inv = 50@14 = 700 b) FIFO End Inv = 5@15 + 30@16 + 15@18 = 825 c) Average Cost = 15.16666 * 50 = 758.33

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