SP\'18 ACco 211-90/Chapter 8 *Problem 8-6 Sandhill Company is a multi product fi
ID: 2544537 • Letter: S
Question
SP'18 ACco 211-90/Chapter 8 *Problem 8-6 Sandhill Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye. Date Transaction Quantity Price/Cost 1/1 Beginning inventory 2,900 2/4 Purchase 2/20 Sale 4/2 Purchase 11/4 Sale $18 26 3,900 4,400 4,900 4,100 34 48 Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.) Average-cost per unit Compute cost of goods sold, assuming Sandhill uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to O decimal places, e.g. 6,548.) Cost of goods sold (a) Periodic system, FIFO cost flow (b) Perpetual system, FIFO cost flow (c) Periodic system, LIFO cost flow (d) Perpetual system, LIFO cost flow (e) Periodic system, weighted-average cost flow (f) Perpetual system, moving-average cost flow Question Attempts: O of 3 used Copyright2000-2018 by John Wley&Sons;, Inc. or related companies All nights reservedExplanation / Answer
Solution:
Average cost per unit = Total cost of goods available for sale / Qty of goods
= $320,200 / 11700 = $27.3675 per unit
Quantity of ending inventory = Qty of goods available for sale - Qty of goods sold
= 11700 - 4400 - 4100 = 3200 units
a) Periodic System FIFO cost flow:
In FIFO, ending inventory of 3200 units will contains from purchase on 2nd april at $34 per unit
Therefore ending inventory = 3200*$34 = $108,800
Cost of goods sold = Cost of goods available for sale - Ending inventory
= $320,200 - $108,800 = $211,400
b: Perpetual system, FIFO cost flow:
Solution c: Periodic System LIFO cost flow:
In this method, ending inventory of 3200 units will consist of 2900 units of begining inventory at $18 and 300 units from purchase on 04.02 at $26
Ending inventory = 2900*$18 + 300*$26 = $60,000
Cost of goods sold = $320,200 - $60,000 = $260,200
Solution d: Perpetual system LIFO cost flow
Solution e: Periodic system weighted average cost flow:
Weighted average cost per unit = $27.3675
Cost of goods sold = (4400+4100) * $27.3675 = $232,624
Solution f: Perpetual system, moving average cost flow:
Computation of Total cost of goods available for Sale Date Opening / Purchase Qty Rate Purchase Cost 1-Jan 2900 $18.00 $52,200.00 4-Feb 3900 $26.00 $101,400.00 2-Apr 4900 $34.00 $166,600.00 Total 11700 $320,200.00Related Questions
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