In: Accounting
Brief Exercise 6-35 (Algorithmic)
Inventory Costing Methods
Tyler Company has the following information related to purchases and sales of one of its inventory items.
Date | Description | Units Purchased at Cost | Units Sold at Retail |
Sept. 1 | Beginning inventory | 400 units @ $12 | |
Sept. 10 | Purchase | 600 units @ $13 | |
Sept. 20 | Sales | 700 units @ $22 | |
Sept. 25 | Purchase | 800 units at $15 |
Assume the company uses a perpetual inventory system.
Required:
Calculate ending inventory and cost of goods sold using the FIFO, LIFO, and average cost methods.
FIFO | LIFO | Avg Cost | |
Cost of goods sold | ? | ? | ? |
Ending inventory | ? | ? | ? |
FIFO | LIFO | AVERAGE COST | |
Cost of Goods Sold |
(400*12)+(300*13) = 8700 |
(600*13)+(100*12) = 9000 |
(700*12.60) = 8820 |
Ending inventory |
(300*13)+(800*15) = 15,900 |
(300*12)+(800*15) = 15,600 |
(14.35*1100) = 15,780 |
Average cost per unit
= [(400*12)+(600*13)]/(400+600) = 12.60
= [(300*12.60)+(800*15)]/(300+800) = 14.35