PERIODIC INVENTORY ANALYSIS METOD Discovery, Inc. uses the periodic inventory me

Question

PERIODIC INVENTORY ANALYSIS METOD Discovery, Inc. uses the periodic inventory method. On January 1, 2018, the beginning inventory consisted of 168 units at a cost of $60 per unit. Purchases for the year are as follows: DATE JAN 17 FEB 11 MAR 21 APR 18 MAY 22 JUNE 16 COST PER UNIT $ 40 $ 46 S 33 S 50 S 52 $ 54 UNITS 18 36 65 72 There are 142 units in ending inventory REQUIRED: COMPUTE THE COST OF ENDING INVENTORY UNDER EACH OF THE FOLLOWING ASSUMPTIONS: 1. FIRST-IN, FIRST-OUT 2. LAST-IN, FIRST-OUT 3. WEIGHTED AVERAGE COST SHOW EACH COMPUTATION ON A SEPARATE SHEET OF PAPER OR EXCEL SPREADSHEET IN A COMPREHENSIBLE MANNER

Explanation / Answer

Units Rate per unit Amount Beginning inventory 168 60 10080 Jan-17 18 40 720 Feb-11 36 46 1656 Mar-21 22 33 726 Apr-18 44 50 2200 May-22 65 52 3380 Jun-16 72 54 3888 Cost of goods available for sale 425 53.29 22650 Less units sold 283 Ending inventory 142 Ending inventory 1 Average cost 7568 (142*53.29) 2 FIFO Units Per unit Total Apr-18 5 50 250 May-22 44 52 2288 Jun-16 65 54 3510 Total 114 6048 3 LIFO Beginning inventory 142 68 9656 Total 142 9656

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