Question

The periodic inventory records of Flexon Prosthetics indicate the following at October 31:

Oct.1	Beginning inventory	9 units @ $60
8	Purchase	4 units @ 60
15	Purchase	10 units @ 70
26	Purchase	3 units @ 80

At October 31 Flexon counts 8 units of inventory on hand.

Requirements:

Compute ending inventory and cost of goods sold, using each of the following methods:

1. Average cost (round average unit cost to the nearest cent)

3. FIFO

4. LIFO

Answer 1

Answer 1.	Average cost
	Ending Inventory =	$     529.20
	COGS =	$ 1,190.70
Answer 2.	FIFO
	Ending Inventory =	$           590
	COGS =	$        1,130
Answer 3.	LIFO
	Ending Inventory =	$           480
	COGS =	$        1,240
	Detailed Calculations as below
	Total Units Available	26	Units
	Units Sold	18	Units
	Ending Units = 26-18=	8	Units
	Weighed Average method
	Date	Units In		Unit Cost		Total
	Beginning Inventory	9	x	$60.00	=	$540
	8-Oct	4	x	60	=	$240
	15-Oct	10	x	70	=	$700
	26-Oct	3		80		$240
		26				$1,720
	Ending Inventory Valuation
		AMOUNT		QUANTITY		RATE
	Weighted Average	$        1,720	/	26	=	$          66.15
		Units		Rate		Amount
	Ending Inventory	8	x	$    66.15	=	$        529.20
		Units		Rate		Amount
	Cost of Goods Sold	18	x	$    66.15	=	$    1,190.70
	FIFO
	Ending Inventory Valuation
	From	Units		Rate		Total
	26-Oct	3	x	80	=	240
	15-Oct	5		70		350
	Total	8				$              590
	Cost of Goods Sold
	Date	Units In		Unit Cost		Total
	Beginning Inventory	9	x	$60.00	=	$540
	8-Oct	4		$60.00		$240
	15-Oct	5	x	70	=	$350
		18				$1,130
	LIFO
	Ending Inventory Valuation
	From	Units		Rate		Total
	Beginning Inventory	8	x	$60.00	=	$480
		8				$480
	Cost of Goods Sold
	Date	Units In		Unit Cost		Total
	Beginning Inventory	1	x	$60.00	=	$60
	8-Oct	4	x	60	=	$240
	15-Oct	10	x	70	=	$700
	26-Oct	3		80		$240
		18				$1,240