Rye Company was formed on December 1, 2010. The following information is availab

Question

Rye Company was formed on December 1, 2010. The following information is available from Rye's inventory record for Product Bread.
Units Unit Cost
January 1, 2011 (beginning inventory) 1,700 $17.00
Purchases:
January 5, 2011 2,600 $20.00
January 25, 2011 2,400 $21.00
February 16, 2011 1,000 $22.00
March 15, 2011 2,100 $25.00
A physical inventory on March 31, 2011, shows 3,000 units on hand.
Instructions
Prepare schedules to compute the ending inventory at March 31, 2011, under each of the following inventory methods:
(a) FIFO.
(b) LIFO.
(c) Weighted-average.
Show supporting computations in good form.


Please show detailed computation.

Explanation / Answer

a)Under FIFO the most recent purchases are in inventory so 2,100 @ 25= 52,500 900 @ 22= 19,800 Inventory 72,300 b) Under LIFO the oldest purchases are in inventory so 1,700 @ 17= 28,900 1,300 @ 20= 26,000 Inventory 54,900 c) Under weighted average we take an average cost so 1700* 17 +2600*20 +2400*21+1,000*22 +2100*25= 205,800 205,800/9,800= 21 Inventory is 3,000*21= 63,000

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