Oahu Kiki tracks the number of units purchased and sold throughout each accounti
ID: 2581842 • Letter: O
Question
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki's records show the following for the month of January. Sales totaled 260 units. Date Units Unit Cost Total Cost ng Inventory January 1 100 75 00 Purchase Purchase January 15 360 95 January 24 240 115 34,200 27,600 Required: 1. Calculate the number and cost of goods available for sale. 700 units Number of Goods Available for Sale Cost of Goods Available for Sale $ 69,300 2. Calculate the number of units in ending inventory nding Inventory L.………. 440: unitsExplanation / Answer
Answer to Part 1.
Number of Goods available for Sale = Beginning Inventory + Units Purchased
Number of Goods available for Sale = 100 + (95 + 115)
Number of Goods available for Sale = 700 units
Cost of Goods available for Sale = Cost of Beginning Inventory + Cost of Goods purchased
Cost of Goods available for Sale = $7,500 + ($34,200 + $27,600)
Cost of Goods available for Sale = $69,300
Answer to Part 2.
Ending Inventory = Number of Cost of Goods available for Sale – Units sold
Ending Inventory = 700 – 260
Ending Inventory = 440 units
Answer to Part 3.
FIFO Method:
Cost of Ending Inventory = (200 * $95) + (240 * $115)
Cost of Ending Inventory = $19,000 + $27,600
Cost of Ending Inventory = $46,600
Cost of Goods sold = Cost of Goods available for Sales – Cost of Ending Inventory
Cost of Goods sold = $69,300 - $46,600
Cost of Goods sold = $22,700
LIFO Method:
Cost of Ending Inventory = (340 * $95) + (100 * $75)
Cost of Ending Inventory = $32,300 + $7,500
Cost of Ending Inventory = $39,800
Cost of Goods sold = Cost of Goods available for Sales – Cost of Ending Inventory
Cost of Goods sold = $69,300 - $39,800
Cost of Goods sold = $29,500
Weighted Average Cost:
Weighted Average Cost per unit = Cost of Goods available for Sale/ Number of Units available for Sale
Weighted Average Cost per unit = 69,300 / 700
Weighted Average Cost per unit = $99
Cost of Ending Inventory = 440 *$99
Cost of Ending Inventory = $43,560
Cost of Goods sold = 260 * $99
Cost of Goods sold = $25,740
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