Wooderson Company sells many products. Gizmo is one of its popular items. Below

Question

Wooderson Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Wooderson Company uses the periodic inventory system. Purchases Sales Units Unit Cost Units Selling Price/Unit 3/1 Beginning inventory 100 $40 3/3 Purchase 60 $50 3/4 Sales 60 $80 3/10 Purchase 200 $55 3/16 Sales 70 $90 3/19 Sales 90 $90 3/25 Sales 60 $90 3/30 Purchase 40 $60

Instructions (a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations) (b) Using the weighted-average method, calculate the amount assigned to the inventory on hand on March 31. (Show computations) (c) Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations)

Explanation / Answer

ending inventory = 400 - 280 = 120 units

(a) COGS(FIFO)

(100*40)+(60*50) +(120*55) = $13,600

(b) Weighted average = 20,400/400 = $51

Ending inventory 120 *51 = $6120

(c) LIFO( Ending inventory )

(100*40 ) +(20*50) = $5,000

3/1 Beginning 100*40 $4,000 3/3 purchases 60*50 $3,000 3/10 purchase 20*55 $11,000 3/30 purchases 40*60 2,400 total 400 units $20,400

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