Question

June 1		Inventory		360			$5			$ 1,800
12		Purchase		720			8			5,760
23		Purchase		540			11			5,940
30		Inventory		180

A1. Calculate the weighted average unit cost

A2. Compute the cost of the ending inventory and the cost of goods sold under FIFO and LIFO.

Answer 1

Solution

weighted average unit cost = $8.33

	FIFO	LIFO
Ending Inventory	$           1,980	$                       900
Cost of Goods Sold	$        11,520	$                 12,600

.

Working

	Units	Cost per unit	value
Beginning Balance	360	$                     5.00	$ 1,800
Purchases
	720	$                     8.00	$ 5,760
	540	$                   11.00	$ 5,940
Cost of goods available for sale	1620		$ 13,500

.

Average Cost of Inventory
Units	(A)	1620
Total Cost	(B)	$ 13,500
Average Cost	(C=B/A)	$ 8.33

.

FIFO
Total Units Available for sale		1620
Units Sold		1440
Closing Stock in Units		180
Valuation
Ending Inventory	180	@	$             11.00	$ 1,980
Cost of Goods sold	13500 minus 1980			$      11,520.00
LIFO
Total Units Available for sale		1620
Units Sold		1440
Closing Stock in Units		180
Valuation
Ending Inventory	180	@	$               5.00	$ 900
Cost of Goods sold	13500 minus 900			$            12,600