Periodic inventory by three methods; cost of goods sold The units of an item ava

Question

Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 40 units at $114 Mar. 10 Purchase 60 units at $126 Aug. 30 Purchase 20 units at $132 Dec. 12 Purchase 80 units at $134 There are 40 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of goods sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Explanation / Answer

Method Ending Inventory Cost of Goods sold FIFO                           5,360                                                20,120 40*134 =40*114 + 60*126 + 20*132 + 40*134 LIFO                           4,560                                                20,920 40*114 = 60*126 + 20*132 + 80*134 Average                           5,096                                                20,384 40*114                                                   4,560 60*126                                                   7,560 20*132                                                   2,640 80*134                                                10,720                               200                                                25,480 Cost per unit                                                   127.4

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