Version A system for its only product. Below are the purchase and sales activity

Question

Version A system for its only product. Below are the purchase and sales activity for the month of October. (20 points) Units Purchased at Cost 1,200 units at $1,000 Units Sold at Retail Date Activities Oct. 1 Beginning inventory Oct. 5 Sale 500 units at $1,250 Oct. 9 Purchase Oct. 16 Purchase Oct. 21Sale 1,300 units at $1,050 750 units at $1,100 1,000 units at $1,250 750 units at $1,350 Oct. 31 Sale (A) Calculate both cost of goods sold and cost of ending inventory for the month o October using FIFO. Show your work. Cost of Goods Sold Cost of Ending Inventory-

Explanation / Answer

Calculate cost of ending inventory and cost of goods sold :

FIFO :

Ending inventory = (750*1100+250*1050) = 1087500

Cost of goods sold = (1050*1050+1200*1000) = 2302500

LIFO :

Ending inventory = (700*1000+300*1050) = 1015000

Cost of goods sold = (500*1000+750*1100+1000*1050) = 2375000

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