Using the inventory flow assumptions of weighted average, LIFO and FIFO calculate the inventory and cost of goods sold for an organisation with the following transactions

Part 1

Using the inventory flow assumptions of weighted average, LIFO and FIFO calculate the inventory and cost of goods sold for an organisation with the following transactions and records and use the information to develop an inventory report/ comparison report. Present your calculations and any relevant assumptions in a report format suited to the financial services industry.

The organisation’s records show the inventory and the purchases to be:

Opening inventory		350 units @ $25
Purchases	December 1	300 units @ $30
	February 17	500 units @ $28
	April 21	250 units @ $35
	June 6	300 units @ $35

The organisation has an opening inventory of 350 units and a closing inventory of 650. Sales figures for the period were $108 000.

Part 2

a. Describe the procedures you would follow in a work organisation, to determine and confirm work requirements, in particular those relevant to this task.

b. Make a verbal presentation of the inventory report/ comparison report you developed, to demonstrate your communication skills. Use language and concepts appropriate to cultural differences and demonstrate your ability to share information that is clear, concise and accurate. You can use Power Point slides, charts or any other presentation aids you require and you might choose to record your presentation.

Submit the report, the presentation notes and any visual aids you used.

Under periodic inventory

Solutions

Expert Solution

	Units	Unit cost	Total cost
Opening inventory	350	25	8750
Purchases
1-Dec	300	30	9000
17-Feb	500	28	14000
21-Apr	250	35	8750
6-Jun	300	35	10500
	1700	Total cost	51000

Periodic Method
No. of units sold
Opening Inventory+purchases-closing inventory
350+1350-650	1050

Weighed Average
cost per unit	30
51000/1700

Cost of good sold	31500	ans
1050*30

LIFO
Cost of good sold	33250
	Units	Unit cost	Total cost
17-Feb	500	28	14000
21-Apr	250	35	8750
6-Jun	300	35	10500
	1050		33250

FIFO
Cost of good sold	28950
	Units	Unit cost	Total cost
Opening inventory	350	25	8750
Purchases
1-Dec	300	30	9000
17-Feb	400	28	11200
	1050		28950

a)	weighted avg	LIFO	FIFO
Sales	108000	108000	108000
Less: COGS	31500	33250	28950
Gross profit	76500	74750	79050

When the prices are rising of the goods purchased than
the highest income is under FIFO as the inventory purchased first
is sold first. LIFO has lowest profit in case of rising prices as the goods
purchased last are sold first. Weighted average is between LIFO and FIFO

Verabal presentation cannot be provided.
But the above data is helpful in making verbal presentation

ekkarill92 answered 1 year ago

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