Question

Problem 8-6 Cullumber Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye. Date Transaction Quantity Price/Cost 1/1 Beginning inventory 2,400 $16 2/4 Purchase 3,400 24 2/20 Sale 3,900 41 4/2 Purchase 4,400 31 11/4 Sale 3,600 45 Your answer is correct. Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.) Average-cost per unit $ Show Solution Link to Text Your answer is partially correct. Try again. Compute cost of goods sold, assuming Cullumber uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.) Cost of goods sold (a) Periodic system, FIFO cost flow $ (b) Perpetual system, FIFO cost flow $ (c) Periodic system, LIFO cost flow $ (d) Perpetual system, LIFO cost flow $ (e) Periodic system, weighted-average cost flow $ (f) Perpetual system, moving-average cost flow $

Answer 1

Solution 1:

Cost of goods available for sale
Particulars	Units	Cost per unit	Total
Beginning Inventory	2400	$16.00	$38,400
Purchases:
4-Feb	3400	$24.00	$81,600
2-Apr	4400	$31.00	$136,400
Total Purchases	7800		$218,000
Goods available for Sale	10200		$256,400

Average cost per unit = $256,400 / 10200 = $25.1373 per unit

Solution 2a:

FIFO (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	2400	$16.00	$38,400.00
Purchases:
4-Feb	3400	$24.00	$81,600.00
2-Apr	4400	$31.00	$136,400.00
Total Purchases	7800		$218,000.00
Goods available for Sale	10200		$256,400.00
Cost of goods sold:
Units from beginning inventory	2400	$16.00	$38,400.00
Units from Feb 4 purchase	3400	$24.00	$81,600.00
Units from Apr 2 purchase	1700	$31.00	$52,700.00
Total cost of goods sold	7500		$172,700.00
Ending Inventory	2700		$83,700.00

Solution 2b:

Computation of ending inventory COGS under FIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	2400	$16.00	$38,400.00	0	$0.00	$0.00	0	$0.00	$0.00	2400	$16.00	$38,400.00
4-Feb	2400	$16.00	$38,400.00	3400	$24.00	$81,600.00	0	$0.00	$0.00	2400	$16.00	$38,400.00
										3400	$24.00	$81,600.00
20-Feb	2400	$16.00	$38,400.00	0	$0.00	$0.00	2400	$16.00	$38,400.00	1900	$24.00	$45,600.00
	3400	$24.00	$81,600.00				1500	$24.00	$36,000.00
2-Apr	1900	$24.00	$45,600.00	4400	$31.00	$136,400.00	0	$0.00	$0.00	1900	$24.00	$45,600.00
										4400	$31.00	$136,400.00
4-Nov	1900	$24.00	$45,600.00	0	$0.00	$0.00	1900	$24.00	$45,600.00	120	$58.20	$6,984.00
	4400	$31.00	$136,400.00				1700	$31.00	$52,700.00	2700	$31.00	$83,700.00
Total							7500		$172,700.00	2700		$83,700.00

Solution 2c:

LIFO (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	2400	$16.00	$38,400.00
Purchases:
4-Feb	3400	$24.00	$81,600.00
2-Apr	4400	$31.00	$136,400.00
Total Purchases	7800		$218,000.00
Goods available for Sale	10200		$256,400.00
Cost of goods sold:
Units from beginning inventory	0	$16.00	$0.00
Units from Feb 4 purchase	3100	$24.00	$74,400.00
Units from Apr 2 purchase	4400	$31.00	$136,400.00
Total cost of goods sold	7500		$210,800.00
Ending Inventory	2700		$45,600.00

Solution 2d:

Computation of ending inventory COGS under LIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	2400	$16.00	$38,400.00	0	$0.00	$0.00	0	$0.00	$0.00	2400	$16.00	$38,400.00
4-Feb	2400	$16.00	$38,400.00	3400	$24.00	$81,600.00	0	$0.00	$0.00	2400	$16.00	$38,400.00
										3400	$24.00	$81,600.00
20-Feb	2400	$16.00	$38,400.00	0	$0.00	$0.00	3400	$24.00	$81,600.00	1900	$16.00	$30,400.00
	3400	$24.00	$81,600.00				500	$16.00	$8,000.00
2-Apr	1900	$16.00	$30,400.00	4400	$31.00	$136,400.00	0	$0.00	$0.00	1900	$16.00	$30,400.00
										4400	$31.00	$136,400.00
4-Nov	1900	$24.00	$45,600.00	0	$0.00	$0.00	3600	$31.00	$111,600.00	1900	$16.00	$30,400.00
	4400	$31.00	$136,400.00							800	$31.00	$24,800.00
Total							7500		$201,200.00	2700		$55,200.00

Solution 2e:

Weighted Average (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	2400	$16.00	$38,400
Purchases:
4-Feb	3400	$24.00	$81,600
2-Apr	4400	$31.00	$136,400
Total Purchases	7800		$218,000
Goods available for Sale	10200	$25.14	$256,400
Cost of goods sold	7500	$25.14	$188,529
Ending Inventory	2700		$67,871

Solution 2f:

Computation of ending inventory COGS under moving Average Cost
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	2400	$16.00	$38,400	0	$0.00	$0	0	$0.00	$0	2400	$16.00	$38,400
4-Feb	2400	$16.00	$38,400	3400	$24.00	$81,600	0	$0.00	$0	5800	$20.69	$120,000
20-Feb	5800	$20.69	$120,000	0	$0.00	$0	3900	$20.69	$80,690	1900	$20.69	$39,310
2-Apr	1900	$20.69	$39,310	4400	$31.00	$136,400	0	$0.00	$0	6300	$27.89	$175,710
4-Nov	6300	$27.89	$175,710	0	$0.00	$0	3600	$27.89	$100,406	2700	$27.89	$75,304
Total							7500		$181,096	2700		$75,304