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Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available...

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 4 units at $31 $124
Aug. 7 Purchase 20 units at $33 660
Dec. 11 Purchase 13 units at $35 455
37 units $1,239

There are 17 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 $

Solutions

Expert Solution

a. FIFO Method

Units Rate Amount
Balance from August 7 purchase 4 $ 33 $        132
Balance from Dec 11 purchase 13 $ 35 $        455
Ending inventory 17 $        587

b. LIFO Method

Units Rate Amount
Balance from August 7 purchase 13 $ 33 $        429
Balance from beginning inventory 4 $ 31 $        124
Ending inventory 17 $        553

c. Weighted average cost

Weighted average cost per unit = Cost of goods available for sale / Number of units available for sale
Weighted average cost per unit = $1,239 / 37
Weighted average cost per unit = $33.49
Ending inventory = 17*$33.49
Ending inventory = $569

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