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 totalled 240 units.

	Date		Units		Unit Cost			Total Cost
Beginning Inventory	January	1	120		$	8		$	960
Purchase	January	15	380			9			3,420
Purchase	January	24	200			11			2,200

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 and (b) weighted average cost methods. (Do not round Weighted average cost per unit. Round your final answers to the nearest dollar amount.)

Answer 1

• Workings

Cost of Goods available for sale
Units	Cost/unit	COG for sale
120	$                   8.00	$                            960.00
380	$                   9.00	$                        3,420.00
200	$                11.00	$                        2,200.00
700		$                        6,580.00

• [1]
  No. of units = 700
  Cost of Goods available for sale = $ 6580
• [2]
  Units in ending inventory = Units available – Units sold
  = 700 – 240
  = 460 units
• [3]

	FIFO	Weighted Average
Ending Inventory	$      4,540.00	$                 4,324.00
Cost of Goods Sold	$      2,040.00	$                 2,256.00

--Working

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	120	$                   8.00	$                            960.00	120	$                 8.00	$                     960.00	0	$                   8.00	$                         -
Purchases:
15-Jan	380	$                   9.00	$                        3,420.00	120	$                 9.00	$                 1,080.00	260	$                   9.00	$            2,340.00
24-Jan	200	$                11.00	$                        2,200.00	0	$               11.00	$                              -	200	$                 11.00	$            2,200.00
TOTAL	700		$                        6,580.00	240		$                 2,040.00	460		$            4,540.00

Weighted Average (Periodic)	Units	Cost per unit	Total
Beginning Inventory	120	$              8.00	$           960.00
Purchases:
15-Jan	380	$              9.00	$       3,420.00
24-Jan	200	$            11.00	$       2,200.00
Total Purchases	580		$       5,620.00
Goods Available for Sales	700		$       6,580.00
Weighted Average cost per unit		$            9.400
Cost of Goods Sold	240	$            9.400	$       2,256.00
Ending Inventory	460	$            9.400	$       4,324.00