Question

Presented below is information related to Blowfish radios for the Skysong Company for the month of July.

Date		Transaction		Units In		Unit Cost		Total		Units Sold		Selling Price		Total
July 1		Balance		160		$4.50		$  720
6		Purchase		1,280		4.60		5,888
7		Sale								480		$6.80		$ 3,264
10		Sale								480		7.10		3,408
12		Purchase		640		4.90		3,136
15		Sale								320		7.20		2,304
18		Purchase		480		5.00		2,400
22		Sale								640		7.20		4,608
25		Purchase		800		4.98		3,984
30		Sale								320		7.30		2,336
		Totals		3,360				$16,128		2,240				$15,920

Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions. (Round answers to 0 decimal places, e.g. 6,578.)

(1) FIFO. Ending Inventory at July 31
(2) LIFO. Ending Inventory at July 31
(3) Weighted-average. Ending Inventory at July 31

Answer 1

1.

FIFO Periodic

Units Available for Sale	= 160 + 1,280 + 640 + 480 + 800	= 3360
Units Sold	= 480 + 480 + 320 + 640 + 320	= 2240
Units in Ending Inventory	= 3360 - 2240	= 1120

Cost of Goods sold	Units	Unit Cost($)	Total($)
Sales from July 1 Inventory	160	4.5	720
Sales from July 6 Inventory	1,280	4.6	5,888
Sales from July 12 Inventory	640	4.9	3,136
Sales from July 18 Inventory	160	5	800
	2,240		10,544

Closing Inventory	Units	Unit Cost($)	Total($)
Inventory from July 18 Purchase	320	5	1600
Inventory from July 25 Purchase	800	4.98	3,984
	1,120		5,584

Closing Inventory using FIFO method = 1,120 units @$5,584

2.)

LIFO Periodic

Units Available for Sale	= 160 + 1,280 + 640 + 480 + 800	= 3360
Units Sold	= 480 + 480 + 320 + 640 + 320	= 2240
Units in Ending Inventory	= 3360 - 2240	= 1120

Cost of Goods sold	Units	Unit Cost($)	Total($)
Sales from July 25 Inventory	800	4.98	3984
Sales from July 18 Inventory	480	5	2400
Sales from July 12 Inventory	640	4.9	3136
Sales from July 6 Inventory	320	4.6	1472
	2,240		10,992

Closing Inventory	Units	Unit Cost($)	Total($)
Inventory from July 6 Purchase	960	4.6	4416
Inventory from July 1 Purchase	160	4.5	720
	1,120		5,136

Closing Inventory using LIFO method = 1,120 units @$5,136

3.)

Weighted Average method
Purchases	Units	Unit cost	Total
Beginning Inventory July 1	160	4.5	720
Purchase on July 06	1,280	4.6	5,888
Purchase on July 12	640	4.9	3,136
Purchase on July 18	480	5	2,400
Purchase on July 25	800	4.98	3,984
	3,360		16,128

Unit per cost = 16,128 / 3,360 = $4.8

Units Sold

= 480 + 480 + 320 + 640 + 320

= 2240

Cost of Goods sold = 2,240 * 4.8 = $10,752

Closing Inventory = 16,128 - 10,752 = $5,376