Problem 6-3A Feb. 20 $ 32486 Correct (b) Calculate Average Cost. (Round answer t

Question

Problem 6-3A

Feb. 20

$ 32486 Correct

(b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)

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FIFO L

IFO

AVERAGE-COST

Problem 6-3A

Groves Company Inc. had a beginning inventory of 139 units of Product MLN at a cost of $11 per unit. During the year, purchases were:

Feb. 20

835 units at $13 Aug. 12 557 units at $15 May 5 696 units at $14 Dec. 8 139 units at $17
Groves Company uses a periodic inventory system. Sales totaled 2,087 units. Your answer is correct. (a) Determine the cost of goods available for sale. The cost of goods available for sale

$ 32486 Correct

(b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)

Average Cost 13.883 Correct Answer

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Your answer is incorrect. Try again. Determine the ending inventory and the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 125.)

FIFO L

IFO

AVERAGE-COST

The ending inventory $ $    $ The cost of goods sold $ $ $ How do you calculate FIFO or LIFO , is there a formula?

Explanation / Answer

Date Units price Total Cost beginning 139 11 1529 Feb-20 835 13 10855 May-05 696 14 9744 Aug-12 557 15 8355 Dec-08 139 17 2363 2366 13.8825 32846 sales 2087 ending inventory Units 279 a Under FIFO it is assumed that inentories that is purchased first is sold first. so ending inventory consist of units from latest purchases i.e. 139 @ 17 and 140@15 4463 Cost of goods sold = 32846-4463 = 28383 b Under LIFO it is assumed that inentories that is purchased latest is sold first. so ending inventory consist of units from first purchases i.e. 139 @ 11 and 140@13 3349 Cost of goods sold = 32846-3349 = 29497 c Under average cost ending inventory is valued at average cost of 13.8825 3873.22 Cost of goods sold = 2087*13.8825 28972.8

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