Exercise 6-7 Larkspur, Inc. reports the following for the month of June Date Uni

Question

Exercise 6-7 Larkspur, Inc. reports the following for the month of June Date Units Total Cost Explanation Inventory Purchases Purchases Inventory Unit Cost June 1 12 23 30 378 217 236 $585 2,268 1,519 Calculate weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average unit cost LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round answers to 0 decimal places, e.g. 125.) FIFO LIFO Average-cost The cost of the ending inventory The cost of goods sold

Explanation / Answer

a) Weighted Average Unit cost $    6.140 Working: Weighted average unit cost = Total cost/Total units = (585+2268+1519)/(117+378+217) = $       6.140 b) FIFO LIFO Average-Cost The cost of ending Inventory $       1,633 $    1,299 $       1,449 The cost of goods sold $       2,739 $    3,073 $       2,923 Working: FIFO stands for first-in-first-out.It means inventory which is bought first is sold first. Total Units available for sale 117+378+217 712 Less units in ending inventory 236 Total units sold 476 So, cost of goods sold is recorded as follows: Date Explanation Units Unit cost Total Cost June 1 Inventory 117 $               5 $        585 12 Purchase 359 $               6 $    2,154 Total 476 $    2,739 LIFO stands for last-in-first out.It means inventory which is bought in last is sold first. Costs of goods sold is recorded as follows: Date Explanation Units Unit cost Total Cost June 23 Purchase 217 $               7 $    1,519 12 Purchase 259 $               6 $    1,554 Total 476 $    3,073 Cost of goods sold under Average cost; Costs of good sold = Units sold x Unit cost = 476 x $    6.140 = $       2,923 FIFO LIFO Average cost Total cost of goods available for sale $    4,372 $       4,372 $    4,372 Less Cost of goods sold $    2,739 $       3,073 $    2,923 Cost of Ending Inventory $    1,633 $       1,299 $    1,449 Total cost of goods available for sale = $           585 + $       2,268 + $       1,519 = $       4,372

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