Question

Whispering Winds Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Whispering Winds Company uses the perpetual inventory system.

				Purchases						Sales
				Units			Unit Cost			Units			Selling Price/Unit
3/1		Beginning inventory		260			$55
3/3		Purchase		156			$60
3/4		Sales								156				$120
3/10		Purchase		520			$65
3/16		Sales								234				$130
3/19		Sales								182				$130
3/25		Sales								130				$130
3/30		Purchase		104			$75

Using the FIFO assumption, calculate the amount charged to cost of goods sold for March.

Using the FIFO assumption, calculate the value of ending inventory for March.

Using the moving average cost method, calculate the amount assigned to the inventory on hand on March 31. (Round average cost per unit to 3 decimal places, e.g. 5.254 and final answer to 2 decimal places, e.g. 2,520.56.)

Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31.

Using the LIFO assumption, calculate the amount charged to cost of goods sold for March.

Answer 1

Whispering winds company

Ending inventory (units) = Opening + Purchases - Closing

= 260 + (156+520+104) - (156+234+182+130) = 338 units

Average cost = Total cost / Total units

= {(260units × 55each)+(156units × 60each)+(520units × 65each)+(104units × 75each)} / (260+156+520+104)

= $ 65,260/1040 units = $ 62.750 per unit

	FIFO	Moving average	LIFO
Cost of goods sold	(156 units × 55 each)+{(104 units × 55 each)+(130 units × 60 each)}+{(26 units × 60 each)+(156 units × 65 each)}+(130 units × 65 each) = 8,580 + 13,520 + 11,700 + 8,450 = $ 42,250		(156 units × 60 each)+(234 units × 65 each)+(182 units × 65 each)+{(104 units × 65 each)+(26 units × 55 each)} = 9,360 + 15,210 + 11,830 + 8,190 = $ 44,590
Ending inventory	(234 units × 65 each)+(104 units × 75 each) = 15,210 + 7,800 = $ 23,010	338 units × 62.750 each = 21,209.50	(234 units × 55 each)+(104 units × 75 each) = 12,870 + 7,800 = $ 20,670