Question

Inventory Costing Methods

Morrison Inc. reported the following information for the month of May:

Inventory, May 1		59 units @ $22
Purchase:
May 7		51 units @ $24
May 18		62 units @ $26
May 27		42 units @ $27

During May, Morrison sold 137 units. The company uses a periodic inventory system.

Required:

What is the value of ending inventory and cost of goods sold for May under the following assumptions.

Assumption	Cost of Goods Sold	Ending Inventory
1. Of the 137 units sold, 50 cost $22, 36 cost $24, 47 cost $26, and 4 cost $27.	$	$
2. FIFO	$	$
3. LIFO	$	$
4. Weighted average method (Round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar.)	$	$

Answer 1

		Units	Unit Cost
	May 01	59	$22.00	$1,298
	May 07	51	$24.00	$1,224
	May 18	62	$26.00	$1,612
	May 27	42	$27.00	$1,134
		214		$5,268
	Ending Inventory = 77 units
1		Units	Unit Cost
		9	$22.00	$198
		15	$24.00	$360
		15	$26.00	$390
		38	$27.00	$1,026
	Ending Inventory			$1,974
	COGS = Beginning inventory + purchases - ending inventory
	=	$1,298 + $3,970 - $1,974
	=	$3,294
2	FIFO
		Units	Unit Cost
		35	$26.00	$910
		42	$27.00	$1,134
	Ending Inventory			$2,044
	COGS = Beginning inventory + purchases - ending inventory
	=	$1,298 + $3,970 - $2,044
	=	$3,224
3	LIFO
		Units	Unit Cost
		59	$22.00	$1,298
		18	$24.00	$432
	Ending Inventory			$1,730
	COGS = Beginning inventory + purchases - ending inventory
	=	$1,298 + $3,970 - $1,730
	=	$3,538
4	Weighted average
		Units	Unit Cost
		59	$22.00	$1,298
		51	$24.00	$1,224
		62	$26.00	$1,612
		42	$27.00	$1,134
		214		$5,268
	The weighted average cost per unit			$24.62
	Ending Inventory = 77 x $24.62 = $1,896
	COGS = Beginning inventory + purchases - ending inventory
	=	$1,298 + $3,970 - $1,896
	=	$3,372