1. The following units of an inventory item were available for sale during the y

ID: 2393089 • Letter: 1

Question

1. The following units of an inventory item were available for sale during the year:

The firm uses the periodic inventory system. During the year, 21 units of the item were sold.

The value of ending inventory rounded to the nearest dollar using average cost is (Round average cost per unit to three decimal place.)

a.$1,099

b.$1,150

c.$2,523

d.$1,071

2. The following units of an inventory item were available for sale during the year:

The firm uses the periodic inventory system. During the year, 47 units of the item were sold.

The value of ending inventory using LIFO is

a.$1,173

b.$470

c.$938

d.$1,408

Beginning inventory 7 units at $51 First purchase 17 units at $53 Second purchase 28 units at $54 Third purchase 16 units at $55

1) Calculate value of ending inventory under average cost :

Ending inventory cost = 3650/68*47 = $2523

So answer is c) $2523

2) Calculate ending inventory under LIFO :

Total units available = 66 Units

Ending inventory units = 66-47 = 19 Units

Ending inventory under LIFO = 10*47+9*52 = $938

So answer is c) $938

So answer is

Unit Cost Beginning inventory 7 357 First purchase 17 901 Second purchase 28 1512 Third purchase 16 880 Total 68 3650

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