Oahu Kiki tracks the number of units purchased and sold throughout each accounti
ID: 2445288 • Letter: O
Question
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 320 units.
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 320 units.
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki's records show the following for the month of January. Sales totaled 320 units. Date Units Unit Cost Total Cost Beginning InvenoryJanuary1 260 85 $22,100 Purchase Purchase January 15 420 January 24 220 115 95 39,900 25,300 Required: 1. Calculate the number and cost of goods available for sale. Number of Goods Available for Sale 900 units Cost of Goods Available for SaleExplanation / Answer
1. Cost of Goods Available for Sale (900 units) - $22100+39900+ 25300 = $ 87300
2. Ending Inventory
Opening Inventory 260
Add: purchase in jan ( 420 +220) 640
less: Sales in January (320)
Ending Inventory 580 units
3. Cost of Goods Sold and Cost of ending Inventory
In FIFO (First in First Out) Method
Cost of Goods sold (320 units)
(260 units @ $85 per unit) = $ 22100
(60 units@ $ 95 per unit)= $ 5700
Total (320 units of sale) $ 27800
Ending Inventory = total cost - cost of goods sold = $87300- $27800 = $ 59500
In LIFO method
Cost of Goods sold (320 units)
(220 units @ $ 115 per unit) = $ 25300
(100 units@ $ 95 per unit)= $ 9500
Total (320 units of sale) $ 34800
Ending Inventory = total cost - cost of goods sold = $87300- $34800 = $ 52500
In Weighted Average cost method
Cost of Goods sold (320 units)
Number of units * weighted Average cost per unit = 320* 97 = $31040
Total (320 units of sale) $31040
Note : Weighted Average cost per unit = total cost of / total number of units = $87300/ 900 = $ 97 per unit
Ending Inventory = total cost - cost of goods sold = $87300- $31040 = $ 56260
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