Question

Windsor Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye.

Date		Transaction		Quantity		Price/Cost
1/1		Beginning inventory		1,800		$15
2/4		Purchase		2,800		22
2/20		Sale		3,300		37
4/2		Purchase		3,800		29
11/4		Sale		3,000		41

Compute cost of goods sold, assuming Windsor uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.)

				Cost of goods sold
(a)		Periodic system, FIFO cost flow		$
(b)		Perpetual system, FIFO cost flow		$
(c)		Periodic system, LIFO cost flow		$
(d)		Perpetual system, LIFO cost flow		$
(e)		Periodic system, weighted-average cost flow		$
(f)		Perpetual system, moving-average cost flow		$

Answer 1

Solution-

Units available for sale = [1800 + 2800 + 3800] = 8400

Sales = [3300 + 3000] = 6300

Ending Inventory = [8400 - 6300] = 2100

a) Periodic FIFO-

[1800 * $15]	$27000
[2800 * $22]	$61600
[1700 * $29]	$49300
6300	$137900

b) Perpetual FIFO - Same to same as Periodic [i.e $137900]

c) Periodic LIFO-

[3800 * $29]	$110200
[2500 * $22]	$55000
6300	$165200

d) Perpetual LIFO-

Date	Purchased	Cost of goods sold	Ending balances
1/1			1800 * $15 = $27000
2/4	2800 * $22 = $61600		1800 * $15 = $27000 2800 * $22 = $61600
2/20		2800 * $22 = $61600 500 * $15 = $7500	1300 * $15 = $19500
4/2	3800 * $29 = $110200		1300 * $15 = $19500 3800 * $29 = $110200
11/4		3000 * $29 = $87000	1300 * $15 = $19500 8000 * $29 = $23200
Total		$156100

e) Periodic weighted-average -

Weighted-average cost per unit = [{(1800 * $15) + (2800 * $22) + (3800 * $29)} / 8400]

= [($27000 + $61600 + $110200) / 8400]

= [ $198800 / 8400]

= $23.6666

Cost of goods sold = [6300 * $23.6666]

= $149100

f) Perpetual moving average-

Date	Purchased	Cost of goods sold	Ending balances
1/1			1800 * $15 = $27000
2/4	2800 * $22 = $61600		4600 * $19.2608 = $88600
2/20		3300 * $19.2608 = $63561	1300 * $19.2608 = $25039
4/2	3800 * 29 = $110200		5100 * 26.5174 = $135239
11/4		3000 * $26.5174 = $79552	2100 * $26.5174 = $55687
Total		$143113

Working-

* [($27000 + $61600) / (1800 + 2800)]

=[$88600 / 4600]

= $19.2608

* [($25039 + $110200) / (1300 + 3800)]

= [$135239 / 5100]

= $26.5174

Ans :-

	Cost of goods sold
a) Periodic system, FIFO cost flow :	$137900
b) Perpetual system , FIFI cost flow :	$137900
c) Periodic system , LIFO cost flow :	$165200
d) Perpetual system , LIFO cost flow :	$156100
e) Periodic system , weighted-average cost flow :	$149100
f) Perpetual system , moving-average cost flow :	$143113