Question

The accounting records of Blossom Company show the following data.

Beginning inventory		5,000 units at	$5
Purchases		7,500 units at	$7
Sales		9,900 units at	$10

Calculate average unit cost. (Round answer to 3 decimal places, e.g. 5.125.)

Determine cost of goods sold during the period under a periodic inventory system using the FIFO method, the LIFO method, and the average-cost method. (Round answers to 0 decimal places, e.g. 125.)

Answer 1

Answer:
Average Unit Cost           = Total Cost / Total Units           =    ( 5,000 x $ 5 ) + (7,500 x $ 7 ) / ( 5,000 + 7,500 )           =      ( $ 25,000 + $ 52,500 ) / 12,500           =       $ 77,500 / 12,500	$ 6.20
Total Sales = 9,900 Units	FIFO
Cost of Goods sold - FIFO        =   ( 5,000 Units x $ 5 ) + ( 9,900 (-) $ 5,000 ) x $ 7        =      $ 25,000 + $ 34,300	$ 59,300
	LIFO
Cost of Goods sold - FIFO        =   ( 7,500 Units x $ 7 ) + ( 9,900 (-) $ 7,500 ) x $ 5        =      $ 52,500 + $ 12,000	$ 64,500
	Average-cost
Cost of Goods sold - Average-cost        =    9,900 Units x $ 6.20	$ 61,380