The following information is available from Jansen\'s inventory records for Prod
ID: 2464754 • Letter: T
Question
The following information is available from Jansen's inventory records for Product X:
Units
Unit Cost
January 1, 2012 ( Beg. Inventory.)
800
$9.00
Purchases:
January 5, 2012
1,300
$10.00
January 25, 2012
1,200
$10.50
February 16, 2012
500
$11.00
March 26, 2012
900
$11.50
A physical inventory on March 31, 2012 shows 1,600 units on hand
REQUIRED:
Compute the ending inventory (assuming periodic system) at March 31, 2012, under each of the following inventory methods:
(a) FIFO
(b) LIFO
(c) Weighted Average
Units
Unit Cost
January 1, 2012 ( Beg. Inventory.)
800
$9.00
Purchases:
January 5, 2012
1,300
$10.00
January 25, 2012
1,200
$10.50
February 16, 2012
500
$11.00
March 26, 2012
900
$11.50
Explanation / Answer
a) FIFO MEthod - Periodic
Units Available for sale = 800+1300+1200+500+900 = 4700
Ending Inventory units = 1600 units
units sold = 4700 - 1600 = 3100
Ending Inventory under FIFO method = 200x10.50+500x11+900x11.50 = 17950
b) LIFO method
Ending Inventory under LIFO method = 800 x10 +800x9 = $15200
c) Weighted Average
The Actual total cost of all purchases or beginning Inventory units = 800x9+1300x10+1200x10.50+500x11+900x11.50 = $48650
Weighted average Cost per unit = 48650/4700 = 10.35
Units in Ending Inventory = 1600 units
Ending Inventory = 1600x10.35 =$16560
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