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	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	$

Answer 1

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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