Laker Company reported the following January purchases and sales data for its on
ID: 2621838 • Letter: L
Question
Laker Company reported the following January purchases and sales data for its only product.
Date Activities Units Acquired at Cost Units sold at Retail
Jan. 1 Beginning Inventory 350 units @ $ 11.00 = $ 3,850
Jan. 10 Sales 190 units @ $ 19.00
Jan. 20 Purchase 420 units @ $ 10.00 = 4,200
Jan. 25 Sales 345 units @ $ 19.00
Jan. 30 Purchase 290 units @ $ 9.00 = 2,610
Totals 1,060 units $ 10,660 535 units
Laker Company uses a perpetual inventory system. For specific identification, ending inventory consists of 525 units, where 290 are from the January 30 purchase, 80 are from the January 20 purchase, and 155 are from beginning inventory.
Please fill in the yellow outlined box.
Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. (Round cost per unit to 2 decimal places.) Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.Explanation / Answer
Inventory sold = 345 units from January 25 purchase
340 units from January 20 purchase
190 units from January 10 purchase
145 units from Beginning inventory
Ending inventory = 290 units from January 30 purchase
80 units from January 20 purchase
155 units from Beginning inventory
Weighted average cost of inventory = Sum{Q(i*P(i))}/SumQ(i)
Weighted average cost of ending inventory = (290*9 + 80*10 + 155*11) / (290 + 80 + 155) = $9.74
Weighted average cost of goods sold = (345*19 + 340*10 + 190*19 + 145*11) / (345 + 340 + 190 + 145) = $14.86
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