Question

Shamrock Company was formed on December 1, 2016. The following information is available from Shamrock’s inventory records for Product BAP. Units Unit Cost January 1, 2017 (beginning inventory) 726 $ 7.00 Purchases: January 5, 2017 1,452 8.00 January 25, 2017 1,573 9.00 February 16, 2017 968 10.00 March 26, 2017 726 11.00 A physical inventory on March 31, 2017, shows 1,936 units on hand. 1) Prepare schedule to compute the ending inventory at March 31, 2017, under LIFO inventory method. 2) Calculate average-cost per unit. (Round answer to 2 decimal places, e.g. 2.76.)

Answer 1

Cost of Goods Available for Sale
Date	Explanation	Units	Unit Cost	Total Cost
Jan-1	Op. Inventory	726	7.00	5,082
Jan-5	Purchases	1,452	8.00	11,616
Jan-25	Purchases	1,573	9.00	14,157
Feb-16	Purchases	968	10.00	9,680
Mar-26	Purchases	726	11.00	7,986
Total		5,445		48,521
Ending Inventory (In Units) = 1,936 Units
Answer 1. LIFO Method
Value of Ending Inventory
Date	Units	Unit Cost	Total Cost
Jan-1	726	7.00	5,082
Jan-5	1,210	8.00	9,680
Total	1,936		14,762
Answer 2.
Average Cost Per Unit = $48,521 (Cost of goods available for sale) / 5,445 Units ( Units Available for Sale)
Average Cost Per Unit = $8.91 per Unit (Approx.)
Value of Ending Inventory = 1,936 Units X $8.91 per unit
Value of Ending Inventory = $17,251.91 or say $17,252 (Approx.)