Question

Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 250 units.

	Date	Units			Unit Cost			Total Cost
Beginning Inventory	January 1		100		$	80		$	8,000
Purchase	January 15		450			90			40,500
Purchase	January 24		200			110			22,000

Required:

1. Calculate the number and cost of goods available for sale.
2. Calculate the number of units in ending inventory.
3. Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.

Complete this question by entering your answers in the tabs below.

Numbers of good available for sale ___________ units

Cost of good available for sale ____________

Ending Inventory_________________units

FIFO: Cost of Inventory ending _____________Cost of good sold_____________

LIFO: Cost of inventory ending ______________Cost of good sold____________

Weighted average cost : Cost of inventory ending ______________cost of good sold

Answer 1

Solutions:

Numbers of good available for sale 750 units

Cost of good available for sale $70500

Ending Inventory 500 units

FIFO: Cost of Inventory ending $49000 Cost of goods sold $21500

LIFO: Cost of inventory ending $44000 Cost of goods sold $26500

Weighted average cost: Cost of inventory ending $47000 cost of goods sold $23500.

Workings:

1)

Calculation of number of goods available for sale and cost of goods available for sale:

Number of goods available for sale = Beginning inventory + Purchase

= 100 + 450 + 200 = 750 units.

Cost of goods available for sale = Beginning inventory cost + Purchase cost

= $8000 + $40500 + $22000 = $70500

2)

Calculation of number of units in ending inventory:

Ending inventory = Beginning inventory + Purchase – units sold = 100 + 450 + 200 – 250 = 500 units.

3)

Calculation of cost of ending inventory and cost of goods sold:

FIFO:

Cost of ending inventory = 200 units @ $110 + 300 units @ $90 = $22000 + $27000 = $49000.

Cost of goods sold = 100 units @ $80 + 150 units @ $90 = $8000 + $13500 = $21500.

LIFO:

Cost of ending inventory = 100 units @ $80 + 400 units @ $90 = $8000 + $36000 = $44000.

Cost of goods sold =200 units @ $110 + 50 units @ $90 = $22000 + $4500 = $26500.

Weighted Average methods:

Weighted Average cost = Total cost / Number of units purchased = $70500 / 750 units = $94/units.

Cost of ending inventory = 500 units @ $94 =$47000

Cost of goods sold =200 units @ $250 + 94 units = $23500.