Date Transaction Units In Unit Cost Total Units Sold Selling Price Total (1) FIF

Question

Date

Transaction

Units In

Unit Cost

Total

Units Sold

Selling Price

Total

(1)
FIFO

(2)
LIFO

(3)
Weighted-Average

Presented below is information related to Blowfish radios for the Cullumber Company for the month of July.

Date

Transaction

Units In

Unit Cost

Total

Units Sold

Selling Price

Total

July 1 Balance 190 $4.40 $  836 6 Purchase 1,520 4.50 6,840 7 Sale 570 $6.70 $ 3,819 10 Sale 570 7.00 3,990 12 Purchase 760 4.80 3,648 15 Sale 380 7.10 2,698 18 Purchase 570 4.90 2,793 22 Sale 760 7.10 5,396 25 Purchase 950 4.88 4,636 30 Sale 380 7.20 2,736    Totals 3,990 $18,753 2,660 $18,639

Explanation / Answer

a) Weighted average cost per unit = 18753/3990 = 4.70 per unit

b) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions.

c) LIFO will give lowest gross profit.

d) LIFO has lowest figure of ending inventory.

FIFO LIFO Average cost Ending inventory (950*4.88+380*4.90) = 6498 (190*4.4+1140*4.5) =5966 1330*4.7 = 6251

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