E6.7B. Inventory Costing Methods Periodic Method The Toon Company, which uses th

Question

E6.7B. Inventory Costing Methods Periodic Method The Toon Company, which uses the periodic in- LO2 ventory system, has the following records: Units Unit Cost $49 42 Purchases: Jan. 6. .. 650 July 15 Dec. 28. 6 . .200 Ending inventory was 360 units. Compute the ending inventory and the cost of goods sold for the year using (a) first-in, first out, (b) weighted-average cost, and (c) last-in, first-out. L02 E68B. Inventory Costing Methods Periodic Method The following data are for the Miller Corporation. which sells just one product: Units Unit Cost Beginning inventory, January 1 Purchases February 11 200 $12 13 15 17 100 March 1 July 1 Sales Calculate the value of ending inventory and cost of goods sold using the periodic method and (a) first- in, first-out, (b) last-in, first-out, and (c) weighted-average cost method. Round your final answers to the nearest dollar.

Explanation / Answer

E6-7B

Cost Of goods available for sale : [100*49]+[650*42]+[550*38]+[200*36]

= 4900+ 27300+20900+7200

= 60300

units available for sale :100+650+550+200 =1500 units

weighted average per unit :cost of goods available for sale /units available for sale

=60300/1500 = $ 40.2 per unit

A)Under FIFO units acquired first are sold first so ending units are left from last purchase

ending inventory : [200*36]+ [360-200]*38

= 7200+6080

=13280

Cost of goods sold :COst of goods availabe for sale -ending inventory

= 60300-13280

= 47020

B)weighted average method :

Ending inventory : 40.2*360 = 14472

COGS :60300-14472 = 45828

c)Under LIFO units acquired last are sold first so ending units are left from initial balance

Ending inventory : [100*49]+[360-100]*42

= 4900+10920

= 15820

COGS :60300-15820=44480

E6 -8B)

COst of goods available for sale :[200*12]+[500*13]+[400*15]+[100*17]

= 2400+ 6500+ 6000+ 1700

=16600

units available for sale :200+500+400+100= 1200

Average cost per unit : 16600/1200=$ 13.83

unit sold :350+400=750

ending inventory : 1200-750= 450 units

A)FIFO :

Ending inventory : [100*17]+[450-100]*15

= 1700+ 5250

= 6950

cost of goods sold: 16600-6950 = 9650

B)Weighted average :

ending inventory : 450* 13.83 =6224

COGS :16600- 6224

= 10376

C)LIFO :

Ending inventory : [200*12]+[450-200]*13

= 2400+3250

= 5650

COGS : 16600-5650 = 10950

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