Hamilton Company uses a periodic inventory system. At the end of the annual acco

Question

Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: UnitsUnit Cost Inventory, December 31, prior year For the current year: 1,910$7 Purchase, March 21 Purchase, August 1 6,050 4,180 2,940 Inventory, December 31, current year Required Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 4 decimal places and final answers to nearest whole dollar amount.) Average Cost FIFO LIFO Ending inventory Cost of goods sold

Explanation / Answer

Cost of good available for sale:

=(1910×$7)+(6050×$6)+(4180×$4)

=$13,370+$36,300+$16,720

=$66,390

FIFO:

Ending inventory:2940×$4=$11,760

Cost of good sold=cost of good available for sale-ending inventory

=$66,390-$11,760

=$54,630

LIFO:

Ending inventory:(1910×$7)+(1030×$6)

=$19,550

Cost of good sold:$66390-$19550=$46,840

Average cost :

Average cost per unit=$66,390/(1910+6050+4180)

=$5.4687

Ending inventory:2940×$5.4687=$16,078

COGS:$66390-16,078=$50,312

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