1. On December 1, Quality Electronics has three DVD players left in stock. All a
ID: 2480576 • Letter: 1
Question
1.
On December 1, Quality Electronics has three DVD players left in stock. All are identical, all are priced to sell at $77. One of the three DVD players left in stock, with serial #1012, was purchased on June 1 at a cost of $47. Another, with serial #1045, was purchased on November 1 for $43. The last player, serial #1056, was purchased on November 30 for $36.
2.
Eggers Company reports the following for the month of June.
Date
Explanation
Units
Unit Cost
Total Cost
FIFO
LIFO
Average-cost
3.Suppose this information is available for PepsiCo, Inc. for 2012, 2013, and 2014.
2012
2013
2014
2012
2013
2014
2012
2013
2014
2012
2013
2014
1.
On December 1, Quality Electronics has three DVD players left in stock. All are identical, all are priced to sell at $77. One of the three DVD players left in stock, with serial #1012, was purchased on June 1 at a cost of $47. Another, with serial #1045, was purchased on November 1 for $43. The last player, serial #1056, was purchased on November 30 for $36.
Calculate the cost of goods sold using the FIFO periodic inventory method, assuming that two of the three players were sold by the end of December, Quality Electronics’ year-end.The cost of goods sold using the FIFO $ If Quality Electronics used the specific identification method instead of the FIFO method, how might it alter its earnings by “selectively choosing” which particular players to sell to the two customers? What would Quality’s cost of goods sold be if the company wished to minimize earnings? Maximize earnings?
Cost of goods sold would be $ if it wished to minimise the earnings. Cost of goods sold would be $ if it wished to maximise the earnings.
2.
Eggers Company reports the following for the month of June.
Date
Explanation
Units
Unit Cost
Total Cost
June 1 Inventory 208 $9 $ 1,872 12 Purchases 642 10 6,420 23 Purchases 347 12 4,164 30 Inventory 399 Calculate weighted-average unit cost. (Round answers to 3 decimal places, e.g. 5.125.)Weighted-average unit cost $ Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round answers to 0 decimal places, e.g. 125.)
FIFO
LIFO
Average-cost
The cost of the ending inventory $ $ $ The cost of goods sold $ $ $3.Suppose this information is available for PepsiCo, Inc. for 2012, 2013, and 2014.
2012
2013
2014
Beginning inventory $1,938 $2,289 $2,512 Ending inventory 2,289 2,512 2,593 Cost of goods sold 17,893 19,976 19,661 Sales revenue 39,161 42,322 42,281Explanation / Answer
Under FIFO the units purchased first sold at first. The cost of the DVDs sold
= 47 + 43 = $90
If wished to minimise its earnings, the cost of the goods sold should be high. That means the Quality should choose those two DVDs, which will give the highest cost of goods sold.
Cost of the goods sold = 47 + 43 = $90
If it wished to maximize the earnings, the cost of the goods sold should be minimum. Therfore the cost of the goods sold = 43+36 = $79
2)
Weighted average cost per unit
= (cost of the beginning inventory + cost of purchase) / number of units available for sale
= (1872+6420+4164) / (208+642+347)
= $10.41
Second part
Number of units sold = (208+642+347) – 399 =798 units
Total cost of the goods available for sale = $12456
FIFO
Cost of goods sold = cost of 208 units of the beginning inventory + cost of (798-208) units from June 12 purchase = 1872 + 590*$10/unit = 1872+5900 = $7772
Cost of ending inventory = Cost of the goods available for sale – cost of goods sold = $12456 - $7772 = $4684
LIFO
Cost of goods sold = cost of 347 units purchased on 23rd June + cost of the (798-347) units purchased on June 12 = 4164 + 4510 = $8674
Average cost
Cost of the goods sold = 798 x $10.41 = $8307.18
Cost of ending inventory = 399 x $10.41 = $4153.59
2012 2013 2014 Beginning inventory 1938 2289 2513 Ending inventory 2289 2512 2593 Total 4227 4801 5106 (a) Average Inventory 2113.5 2400.5 2553 (b) Sales revenue 39161 42322 42281 (c) Inventory turnover (b/a) 18.5 17.6 16.6 Days in inventory (365 days / c) 19.7 20.7 22.0Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.