Problem One-Shown below is the activity for one of the products of Random Creati

Question

Problem One-Shown below is the activity for one of the products of Random Creations January 1 balance, 80 units@$50 $4,000 Purchases January 18:40 units@$51 January 28:40 units@ $52 Sales: January 12: 30 units January 22: 30 units January 31: 45 units a. Random Creations uses FIFO and a perpetual inventory system. Compute Cost of Goods Sold (6 pts) Show ALL your work b. Random Creations uses LIFO and a perpetual inventory system. Compute Cost of Goods Sold (6 pt Show ALL your work! c. Random Creations uses average cost and a perpetual inventory system. Compute Cost of Goods Sold (6 pts) Show ALL your work!

Explanation / Answer

Price per unit Units 01-Jan Beginning inventory 4000 50 80 18-Jan Purchases 2040 51 40 28-Jan Purchases 2080 52 40 Cost of goods available for sale 8120 160 Average cost 50.75 Less units sold 105 Ending inventory 55 Ending inventory Average cost 2791 (55*50.75) FIFO Units Per unit Total 18 jan purchases 15 51 765 28 jan purchases 40 52 2080 Total 55 2845 LIFO 1 jan purchases 50 50 2500 18 jan purchases 5 52 260 Total 55 2760 Average FIFO LIFO Cost of goods available for sale 8120 8120 8120 Less Ending inventory 2791 2845 2760 Cost of goods sold 5329 5275 5360

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