Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units
ID: 3216391 • Letter: P
Question
Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods
The units of an item available for sale during the year were as follows:
There are 16 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (round per unit cost to two decimal places and your final answer to the nearest whole dollar).
Jan. 1 Inventory 7 units at $33 $231 July 7 Purchase 14 units at $36 504 Nov. 23 Purchase 19 units at $38 722 40 units $1,457Explanation / Answer
a) FIFO method: We have the last in still on hand, that is 19 at $38. But there are 16 units of the item in the physical inventory at Dec 31.
So, FIFO = 16 x $38 = $608
b) LIFO method: We have the first in still on hand, that is 7 at $33. But there are 16 units of the item in the physical inventory at Dec 31. So, we have (16-7) = 9 units at $36.
So, FIFO = 7 x $33 + 9 x $36 = $555
c) Weighted average cost method: ($1457/40) x 16 = $582.8
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