Laramie Distribution markets CDs of numerous performing artists. At the beginnin

Question

Laramie Distribution markets CDs of numerous performing artists. At the beginning of March, Laramie had in beginning inventory 3,138 CDs with a unit cost of $9. During March Laramie made the following purchases of CDs.


March 5 2,510 @ $10 March 21 5,020 @ $13
March 13 6,903 @ $11 March 26 2,510 @ $14

During March 16,315 units were sold. Laramie uses a periodic inventory system.

(a) Determine the cost of goods available for sale.


(b) Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average cost). (For average cost round the per unit calculations to 3 decimal places, e.g. 5.355. Round all answers to 0 decimal places, e.g. 22,657.)


FIFO LIFO Average Cost
Ending Inventory
Cost of Goods Sold

Explanation / Answer

a) 3138*$9=$28,242 2510*$10=25,100 6903*$11=75,933 5020*$13=65260 2510*$14=35140 Total 20,081 units $229,675 - cost of goods avalable for sale b) 1.Ending inventory FIFO Total units - sold units =20,081-16,315=3766 ending inventory 2510*$14+(3766-2510)*$13=35140+16328=51468 ending inventory FIFO Ending Inventory LIFO =3138*9+(3766-3138)*10=28242+6280=34522 Ending inventory Averege cost Total cost/totalunits=229,675/20081=$11.437/unit Ending inentory 3766*$11.437=$43071.742 2. CGS FIFO 16,315-(3138+2510+6903)=3764units will be taken from 5020 units at $13 3138*9=28242 2510*10=25100 6903*11=75933 3764*13=48932 CGS FIFO=178,207 CGS LIFO 2510+5020+6903+X=16315 X=16315-14433=1882 2510*14=35140 5020*13=65260 6903*11=75933 1882*10=18820 CGS LIFO=195153 CGS Average cost=16315units*$11.437/unit=$186,594.65

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