The inventory data for an item for November are: Nov 1 Beginning inventory: 20 u

Question

The inventory data for an item for November are:

Nov 1 Beginning inventory: 20 units at $60

Nov 4 sold: 10 units

Nov 10 Purchased: 30 units at $63

Nov 17 sold: 20 units

Nov 30 Purchased: 10 units at $66

A. Using the perpetual inventory system, costing by the LIFO method, what is the cost of the merchandise inventory of 30 units on November 30th?

B. Using the perpetual inventory system, costing by the FIFO method, what is the cost of the merchandise inventory of 30 units on November 30th?

C. Using the perpetual inventory system, costing by the average cost method, what is the cost of the merchandise inventory of 30 units on November 30th?

D. Using the periodic inventory system, costing by the LIFO method, what is the cost of the merchandise inventory of 30 units on November 30th?

E. Using the periodic inventory system, costing by the FIFO method, what is the cost of the merchandise inventory of 30 units on November 30th?

F. Using the periodic inventory system, costing by the average cost method, what is the cost of the merchandise inventory of 30 units on November 30th?

Explanation / Answer

A Perpetual inventory system, costing by the LIFO method on 30Nov. cost of inventory of 30 units :

Date purchase sale Balance

   1Nov. 20 units * $60 20 units * $60

$1200

  4Nov. 10 units* $60 10units * $60

   $600   

10Nov 30units * $63 10 units *$60

30 units * $63

$2490

17Nov 20units * $63 10units * $60

10 units * $63

$1230

30 Nov 10units * $66 10units * $60

10units *$63

10 units * $66

$1890   

D. periodic inventory system, costing by the LIFO method on 30Nov. cost of inventory of 30 units:

10 Nov 10 units * $63 = $630

1 Nov. 20 units * $60 = $1200

   $1830

E. Periodic inventory system, costing by the FIFO method on 30Nov. cost of inventory of 30 units:

10 Nov . 20 units * $63 =$1260

30 Nov. 10 units * $66 =$660

   =$1920

F. periodic inventory system,costing by the average cost method on 30Nov. cost of inventory of 30 units:

   Average cost = (purchase cost + opening cost) / ( opening units + purchasing units)

= ($60 +$63 +$66 ) / (20 + 30 +10)

= $189 / 60units

= $3.15 per unit

30Nov. 30 units * $3.15 $94.5

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