Fall Term 20T Inventory: Each Question Is Worth 3 Points April 1 Beginning Inven
ID: 2592514 • Letter: F
Question
Fall Term 20T Inventory: Each Question Is Worth 3 Points April 1 Beginning Inventory is 10,000 units @ S20 per unit April 3 Purchased 5000 units @ S15 per unit April 5 Purchased 8,000 units@$20 per unit April 10 Sold 6,000 @ $50 per unit April 17 Purchased 4,000 units @ S30 per unit April 21 Sold 15,000 a S100 per unit April 23 Purchased 20,000 units @ S22 per unit April 24 Sold 6,000 units @ S120 per unit April 30 Purchased 1,000 units@ 25 per unit with h got nu 1. Adopting PERIODIC FIFO what is the cost of goods sold? 2. Adopting PERIODIC LIFO what is the cost of goods sold? 3. Adopting PERIODIC AVERAGE what is the cost of goods sold? 4. Adopting PERPETUAL FIFO what is the cost of goods sold? 5. Adopting PERPETUAL LIFO what is the cost of goods sold? 6. What is the total dollar amount of sales for the month of April? 7. What is the gross profit when using PERIODIC AVERAGE 8. What is concept behind Lower of Cost or Market principal?Explanation / Answer
Answer:
Beginning Inventory = 10,000 Units
Units Sold = 6,000 + 15,000 + 6,000
Units sold = 27,000 Units
Part 1.
Cost of goods sold = (10,000 * $20) + (5,000 * $15) + (8,000 * $20) + (4,000 * $30)
Cost of goods sold = $200,000 + $75,000 + $160,000 + $120,000
Cost of goods sold =$555,000
Part 2.
Cost of goods sold = (1,000 * $25) + (20,000 * $22) + (4,000 * $30) + (2,000 *$20)
Cost of goods sold = $25,000 + $440,000 + $120,000 + $40,000
Cost of goods sold = $625,000
Part 3.
Weighted Average Cost per unit = Cost of goods available for Sale / Units available for Sale
Cost of Goods sold = Beginning Inventory + Cost of Purchases
Cost of Beginning Inventory = 10,000 * $20 = $200,000
Cost of Purchases = (5,000 * $15) + (8,000 * $20) + (4,000 * $30) + (20,000 * $22) + (1,000 * $25)
Cost of Purchases = $75,000 + $160,000 + $120,000 + $440,000 + $25,000
Cost of Purchases = $820,000
Cost of Goods sold = $200,000 + $820,000
Cost of Goods sold = $1,020,000
Units available for Sale = 10,000 + 5,000 + 8,000 + 4,000 + 20,000 + 1,000
Units available for Sale = 48,000 Units
Weighted Average Cost per unit = 1,020,000 / 48,000
Weighted Average Cost per unit = $21.25
Cost of Goods sold = 27,000 * $21.25
Cost of Goods sold = $573,750
Part 4.
April 10 Sales:
Units sold includes 6,000 units from Beginning Inventory
Cost of Goods Sold = 6,000 * $20
Cost of Goods Sold = $120,000
April 21 Sales:
Units sold includes 4,000 units from beginning inventory, 5,000 units from April 3 purchase and 6,000 units from April 5 purchase.
Cost of Goods Sold = 4,000 * $20 + 5,000 * $15 + 6,000 * $20
Cost of Goods Sold = $275,000
April 24 Sales:
Units sold includes 2,000 units from April 5 purchase, 4,000 units from April 17 purchase.
Cost of Goods Sold = 2,000 * $20 + 4,000 * $30
Cost of Goods Sold = $160,000
Total Cost of Goods Sold = $275,000 + $160,000 + $120,000
Total Cost of Goods Sold = $555,000
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