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Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost Assume that...

Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost
Assume that Madden Company reports the following initial balance and subsequent purchase of inventory.

Inventory balance at beginning of year 1,820 units @ $150 each $273,000
Inventory purchased during the year 2,380 units @ $180 each 428,400
Cost of goods available for sale during the year 4,200 units $701,400

Assume that 2,800 units are sold during the year. Compute the cost of goods sold for the year and the inventory on the year‑end balance sheet under the following inventory costing methods.

COGS Ending Inventory
a. FIFO Answer Answer
b. LIFO Answer Answer
c. Average Cost Answer Answer

Solutions

Expert Solution

Calculate following

COGS Ending inventory
a FIFO 701400-252000 = 449400 1400*180 = 252000
b LIFO 701400-210000 = 491400 1400*150 = 210000
c Average cost 701400-233800 = 467600 701400/4200*1400 = 233800

ekkarill92 answered 2 years ago
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