Question

Blossom Company’s record of transactions concerning part X for the month of April was as follows.

Purchases							Sales
April     1	(balance on hand)		420	@	$7.30		April     5		620
4			720	@	7.40		12		520
11			620	@	7.70		27		1,440
18			520	@	7.80		28		150
26			920	@	8.20
30			520	@	8.50

A)Calculate average-cost per unit.

B)Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost.

C)If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would be shown as ending inventory under (1) FIFO, (2) LIFO and (3) Average-cost?

Answer 1

	Summery
		FIFO	LIFO	Average cost
A	Average cost per unit = $7.85
B	Ending inventory qty	990	990	990
C	Cost of ending inventory	$     8,274	$     7,856	$                      8,134