Exercise 8-12 Units Unit Cost CRANE COMPANY COMPUTATION OF INVENTORY FOR PRODUCT

Question

Exercise 8-12

Units

Unit Cost

CRANE COMPANY
COMPUTATION OF INVENTORY FOR PRODUCT
BAP UNDER FIFO INVENTORY METHOD
March 31, 2017

Units

Unit Cost

Total Cost

LINK TO TEXT

CRANE COMPANY
COMPUTATION OF INVENTORY FOR PRODUCT
BAP UNDER LIFO INVENTORY METHOD
March 31, 2017

Units

Unit Cost

Total Cost

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Weighted-Average

Exercise 8-12

Crane Company was formed on December 1, 2016. The following information is available from Crane’s inventory records for Product BAP.

Units

Unit Cost

January 1, 2017 (beginning inventory) 684 $ 6.00 Purchases:    January 5, 2017 1,368 7.00    January 25, 2017 1,482 8.00    February 16, 2017 912 9.00    March 26, 2017 684 10.00
A physical inventory on March 31, 2017, shows 1,824 units on hand.

Explanation / Answer

1. COMPUTATION OF INVENTORY FOR PRODUCT BAP UNDER FIFO INVENTORY METHOD

2. COMPUTATION OF INVENTORY FOR PRODUCT BAP UNDER LIFO INVENTORY METHOD

3. Weighted Average Cost per Unit = Total cost of all purchased or begininning inventory/all purchased or beginning inventory units

= 40584/5130 = 7.91

4. Ending inventory at March 31, 2017, under Weighted-average inventory method

Opening & purchase units : 5130 units

Sold unit : 3306 units

Units in hand : 1824 units

Ending inventroy cost : 1824units*7.91 = 14427.84

Particulars Units Unit Cost Total Cost a. Opening Inventory 684 6 4,104 Add : Purchases 05.01.2017 1368 7 9576 25.01.2017 1482 8 11856 16.02.2017 912 9 8208 26.03.2017 684 10 6840 b. Total Purchases 40584 Less : Sales on FIFO Basis i. 684 6 4104 ii. 1368 7 9576 iii. 1254 8 10032 c. Total sold (23712) Total Closing Inventory (a+b-c) 1824 16872 228 8 1824 912 9 8208 684 10 6840

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