Question

In: Operations Management

Cheyenne Corp. uses the periodic inventory system and had 160 units in beginning inventory at a...

Cheyenne Corp. uses the periodic inventory system and had 160 units in beginning inventory at a total cost of $20,000. The company purchased 320 units at a total cost of $49,600. At the end of the year, Cheyenne had 85 units in ending inventory.

(a)

Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round average-cost per unit and final answers to 0 decimal places, e.g. 1,250.)

FIFO

LIFO

Average-cost

The cost of the ending inventory $ $ $
The cost of goods sold $ $ $

Solutions

Expert Solution

  • Requirement [a]

FIFO

LIFO

Average Cost

Ending Inventory

$    13,175.00

$            10,625.00

$               12,325.00

Cost of Goods Sold

$    56,425.00

$            58,975.00

$               57,275.00

  • Workings

FIFO

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

160

$              125.00

$                      20,000.00

160

$             125.00

$               20,000.00

0

$              125.00

$                         -  

Purchases:

320

$              155.00

$                      49,600.00

235

$             155.00

$               36,425.00

85

$              155.00

$          13,175.00

TOTAL

480

$                      69,600.00

395

$               56,425.00

85

$          13,175.00

LIFO

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

160

$              125.00

$                      20,000.00

75

$             125.00

$                 9,375.00

85

$              125.00

$          10,625.00

Purchases:

320

$              155.00

$                      49,600.00

320

$             155.00

$               49,600.00

0

$              155.00

$                         -  

TOTAL

480

$                      69,600.00

395

$               58,975.00

85

$          10,625.00

Average Method

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

160

$              125.00

$                      20,000.00

Purchases:

320

$              155.00

$                      49,600.00

TOTAL

480

$         145.0000

$                      69,600.00

395

$        145.0000

$               57,275.00

85

$          145.0000

$          12,325.00


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