hm.tpx Cortez Company sells chairs that are used at computer stations. Its begin

Question

hm.tpx Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 70 units at $85 per unt Dunng the year, Cortez made two batch purchases ofths dar The frit was a 206- unt purchase at $96 per unit, the second was a 244-unit purchase at $102 per unit. During the peiod sold 342 chairs Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory assuming that Conez uses 3. FIFO Units Unit Cost 5.950 19 776 24 50614 From second purchase Total Unit Cost rom second purchase

Explanation / Answer

a) FIFO Units Unit cost Cost of goods sold From beginning inventory 70 $           85.00 $              5,950 From first purchase 206 $           96.00 $            19,776 From second purchase 66 $        102.00 $              6,732 Total COGS $            32,458 FIFO Units Unit cost Ending inventory From second purchase 178 $        102.00 $      18,156.00 b) LIFO Units Unit cost Cost of goods sold From second purchase 244 $        102.00 $            24,888 From first purchase 98 $           96.00 $              9,408 Total COGS $            34,296 LIFO Units Unit cost Ending inventory From first purchase 108 $           96.00 $            10,368 From beginning inventory 70 $           85.00 $              5,950 Total ending inventory $            16,318 c) Weighted average: = Total cost/Total units = (70*85+206*96+244*102)/(70+206+244) = $              97.33 rounded off to $97.00 Units Rate Total Cost of goods sold 342 $           97.00 $            33,174 Ending inventory 178 $           97.00 $            17,266

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