Exercise 8-11 Metlock Company\'s record of transactions for the month of April w

Question

Exercise 8-11 Metlock Company's record of transactions for the month of April was as follows. Purchases Sales April 1 (balance on han 714 $6.00 1,785 6.09 952 6.41 1,428 6.61 833 6.81 595 7.01 4 8 13 21 29 April 3 595 $11.00 9 1,666 @ 11.00 11 714 12.00 23 1,428 12.00 27 1,071 13.00 5,474 6,307 Assuming that periodic inventory records are kept in units only, calculate the average-cost per unit. (Round answer to 2 decimal places, e.g. 2.76.) Average-cost per unit per unit LINK TO TEXT Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using LIFO and average-cost. (Round answer to 0 decimal places, e.g 2,760.) LIFO Average-cost LINK TO TEXT

Explanation / Answer

a) Calculation of Average cost per unit: Unit cost= Total cost/ total number of units available for sale                    =(714*6+1785*6.09+952*6.41+1428*6.61+833*6.81+595*7.01)/6307= 40539.73/6307=$6.43 average cost per units is $6.43 b)Calculation of ending inventory(Periodic) LIFO Units available for sale= 6307 Units sold=5474 Ending inventory=833 Ending inventory Units Unit cost Total Inventory from beginning inventory 714 6 4284 Inventory from purchase April 4 119 6.09 724.71 833 5008.71 Ending inventory is $5009 Average cost : Ending inventory=833*6.43=$5356.19 Ending inventory is $5356 c) Calculation of ending inventory(perpetual) FIFO Purchases Sales Balance Date Units Unit Cost Total Units Unit Cost Total Units Unit Cost Total Apr-01 - - - - - - 714 6 4284 Apr-03 595 6 3570 119 6 714 Apr-04 1785 6.09 10870.65 119 6 714 1785 6.09 10870.65 Apr-08 952 6.41 6102.32 119 6 714 1785 6.09 10870.65 952 6.41 6102.32 Apr-09 119 6 714 238 6.09 1449.42 1547 6.09 9421.23 952 6.41 6102.32 Apr-11 238 6.09 1449.42 476 6.41 3051.16 476 6.41 3051.16 Apr-13 1428 6.61 9439.08 476 6.41 3051.16 1428 6.61 9439.08 Apr-21 833 6.81 5672.73 476 6.41 3051.16 1428 6.61 9439.08 833 6.81 5672.73 Apr-23 476 6.41 3051.16 476 6.61 3146.36 952 6.61 6292.72 833 6.81 5672.73 Apr-27 476 6.61 3146.36 238 6.81 1620.78 595 6.81 4051.95 Apr-29 595 7.01 4170.95 238 6.81 1620.78 595 7.01 4170.95 Ending inventory=1620.78+4170.95=$5791.73 Ending inventory is $5792 LIFO Date Units Unit Cost Total Units Unit Cost Total Units Unit Cost Total Apr-01 - - - - - - 714 6 4284 Apr-03 595 6 3570 119 6 714 Apr-04 1785 6.09 10870.65 119 6 714 1785 6.09 10870.65 Apr-08 952 6.41 6102.32 119 6 714 1785 6.09 10870.65 952 6.41 6102.32 Apr-09 952 6.41 6102.32 119 6 714 714 6.09 4348.26 1071 6.09 6522.39 Apr-11 714 6.09 4348.26 119 6 714 357 6.09 2174.13 Apr-13 1428 6.61 9439.08 119 6 714 357 6.09 2174.13 1428 6.61 9439.08 Apr-21 833 6.81 5672.73 119 6 714 357 6.09 2174.13 1428 6.61 9439.08 833 6.81 5672.73 Apr-23 833 6.81 5672.73 119 6 714 595 6.61 3932.95 357 6.09 2174.13 833 6.61 5506.13 Apr-27 833 6.61 5506.13 119 6 714 238 6.09 1449.42 119 6.09 724.71 Apr-29 595 7.01 4170.95 119 6 714 119 6.09 724.71 595 7.01 4170.95 Ending inventory=714+724.71+4170.95=$5609.66 Ending inventory is $5610 d) Calculation of cost of goods sold (FIFO periodic) ( units sold=5474) Particulars Units Unit cost Amount Sale from beiginning inventory 714 6 4284 Sale from purchase april-4 1785 6.09 10870.65 Sale from purchase april-8 952 6.41 6102.32 Sale from purchase april-13 1428 6.61 9439.08 Sale from purchase april-21 595 6.81 4051.95 Cost of goods sold 5474 34748 Cost of goods sold =$34748 e) FIFO inventory method will show the highest income

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