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:

Jan. 1	Inventory	5	units at $34	$170
Aug. 7	Purchase	19	units at $35	665
Dec. 11	Purchase	14	units at $37	518
		38	units	$1,353

There are 19 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).

a.	First-in, first-out (FIFO)	$
b.	Last-in, first-out (LIFO)	$
c.	Weighted average cost	$

Answer 1

Ans.	Purchase date	Activity	Units	Rate	Cost
	01-Jan	Beginning inventory	5	$34.00	$170
	07-Aug	Purchases	19	$35.00	$665
	11-Dec	Purchases	14	$37.00	$518
	Total units and cost of goods available for sale	38		$1,353
Ans. A	Periodic FIFO:
	Date	Units	Rate	Total
	11-Dec	14	$37.00	$518
	07-Aug	5	$35.00	$175
	Ending inventory	19		$693
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. B	Periodic LIFO:
	Date	Units	Rate	Total
	01-Jan	5	$34.00	$170
	07-Aug	14	$35.00	$490
	Ending inventory	19		$660
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.
Ans. C	Weighted average cost:
	Average cost per unit =   Total cost of goods available for sale / Total units available
	$1,353 / 38
	$35.61	per unit
	Ending inventory =   Average cost per unit * Ending inventory units
	$35.61 * 19
	$677	(rounded)