Question

Express Distribution markets CDs of the performing artist Fishe. At the beginning of October, Express had in beginning inventory 3,100 of Fishe’s CDs with a unit cost of $7. During October, Express made the following purchases of Fishe’s CDs. Oct. 3 3,875 @ $8 Oct. 19 4,650 @ $10 Oct. 9 5,425 @ $9 Oct. 25 6,200 @ $11 During October, 16,895 units were sold. Express uses a periodic inventory system. Determine the cost of goods available for sale. Cost of goods available for sale $ LINK TO TEXT Calculate cost per unit. (Round answer to 2 decimal places, e.g. 2.25.) Cost per unit $ LINK TO TEXT Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 1,250. Use weighted-average unit cost rounded to 2 decimal places for computations.) FIFO LIFO AVERAGE-COST The ending inventory $ $ $ The cost of goods sold $ $ $ LINK TO TEXT Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement? (1) produces the highest inventory amount, $ . (2) produces the highest cost of goods sold, $ . LINK TO TEXT

Answer 1

cost of goods sold FIFO
DATE	Units	cost	total cost
1-Oct	3100	7	21700
3-Oct	3875	8	31000
9-Oct	5425	9	48825
19-Oct	4495	10	44950
cost of goods sold	16895		146475
cost of ending inventory -FIFO		cost	total cost
19-Oct	155	10	1550
25-Oct	6200	11	68200
cost of ending inventory -FIFO	6355		69750
cost of goods sold LIFO
DATE	Units	cost	total cost
25-Oct	6200	11	68200
19-Oct	4650	10	46500
9-Oct	5425	9	48825
3-Oct	620	8	4960
cost of goods sold	16895		168485
cost of ending inventory -LIFO		cost	total cost
3-Oct	3255	8	26040
1-Oct	3100	7	21700
cost of ending inventory -LIFO	6355		47740
WEIGHTED AVERAGE COST	Units	cost	total cost
1-Oct	3100	7	21700
3-Oct	3875	8	31000
9-Oct	5425	9	48825
19-Oct	4650	10	46500
25-Oct	6200	11	68200
NO OF UNITS	23250		216225
WEIGHTED AVERAGE COST	216225/23250	9.3
COST OF GOODS SOLD	NO OF UNITS SOLD*AVERAGE COST	16895*9.3	157123.5
COST OF ENDING INVENTORY	NO OF UNITS IN ENDING INVENTORY*AVERAGE COST	6355*9.3	59101.5
the highest inventory amount for the balance sheet	69750	FIFO
the highest cost of goods sold for the income statement	168485	LIFO