Suggs company sells coffee makers used in business offices . its beginning inven

Question

Suggs company sells coffee makers used in business offices. its beginning inventory of coffee makers was 400 units at$50 per unit. During the year, Suggs made two batch purchases of coffee makers. The first was a $500-unit purchase at $55 per unit; the second was a 600 unit purchase at $58 per unit. during the period, Suggs sold 1,200 coffee makers. Determine the amount of product cost that would be allocated to cost of goods sold and ending inventory, assuming Suggs uses a. FIFO b. LIFO c. Weighted Average Determine the amount of product cost that would be allocated to cost of goods sold and ending inventory, assuming Suggs uses a. FIFO b. LIFO c. Weighted Average

Explanation / Answer

As per FIFO

Ending Inventory = 300*58 = $17400

Cost of good sold = 400*50+500*55+300*58 =$64,900

As per LIFO

Ending Inventory = 300*50 = $15000

Cost of good sold = 600*58 + 500*55 +100*50 = $67300

As per Weighted Avg

Ending Inventory = 82300/1500*300 = $16460

Cost of good sold =82300/1500*1200 = $65840

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