Bronco General Hospital purchased OR implants on the following dates and amounts

Question

Bronco General Hospital purchased OR implants on the following dates and amounts. Date Units Price Total 1/1 Beginning Balance 55 1500 82500 3/27 Purchase 20 1450 29000 4/15 Purchase 15 1600 24000 6/25 Purchase 30 1500 45000 7/30 Purchase 22 1550 34100 9/28 Purchase 15 1600 24000 11/15 Purchase 18 1900 34200 12/31 Ending Balance 60 A – Using FIFO what is the ending cost of inventory? B - Using LIFO what is the ending cost of inventory? B - Using weighted average what is the ending cost of inventory?

Explanation / Answer

A) Ending inventory as per FIFO

Ending units 60 consist of purchase of 11/15 purchase of 18 + 9/28 purchase of 15 units + 7/30 purchase of 22 units + balance 5 units of 6/25 purchase

= 34200 + 24000 + 34100 + 5 *1500 = 99800

B) Ending inventory as per LIFO

Ending inventory = Begiining balance of 55 units + 5 units of next purchase

= 82500 + 5 * 1450 = 89750

C) Weighted average method

Weighted average cost = ( 82500 + 29000 + 24000 + 45000 + 34100 + 24000 + 34200) / ( 55 + 20 + 15 + 30 + 22 + 15 + 18) = 1558.86

Ending inventory = 60 * 1558.86 = 93532

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