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Calculate cost of goods sold and ending inventory for Emergicare’s bandages orders using FIFO, LIFO and...

Calculate cost of goods sold and ending inventory for Emergicare’s bandages orders using FIFO, LIFO and average cost. There are 38 units in ending inventory. (Do not round intermediate calculations, such as average cost per unit values. Round your answers to the nearest cent.) Date Units purchased Cost per unit Total cost January 1 54 $ 7.50 $ 405.00 April 1 49 6.75 330.75 June 1 64 6.50 416.00 September 1 59 7.00 413.00 Total 226 $ 1,564.75. FIFO $ Cost of goods sold $ Ending Inventory    LIFO $ Cost of goods sold $ Ending Inventory    Average Cost $ Cost of goods sold $ Ending Inventory

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Expert Solution

If Emergicare's bandages are using FIFO method of inventory valuation, the ending inventory would be valued at the most recent prices. That is the ending inventory of 38 units will be valued at $7.00 per unit, and the ending inventory would be $266 ( 38 units x $7) and cost of goods sold would be the remaining amount $1,298.75 ($1,564.75 - $266).

If Emergicare's bandages are using LIFO method of inventory valuation, the ending inventory would be valued at the most old prices. That is the ending inventory of 38 units will be valued at $7.50 per unit, and the ending inventory would be $285 (38 units x $7.50) and the cost of goods sold would be the remaining amount $1,279.75 ($1,564.75 - $285).

If Emergicare's bandages are using Average cost method of inventory valuation, the ending inventory would be valued at the average price of the entire inventory. It would be the simple average of the inventory price. Simple average of the inventory price in the given scenario is $6.92 ( $1,564.75 226 units).

Ending Inventory under average cost method = $263.10 (38 units x $6.92)

Cost of goods sold under average cost method = $1,301.65 ( $1,564.75 - $263.10)

ekkarill92 answered 1 year ago
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