Question

Grouper Corp. uses a periodic inventory system and reports the following for the month of June.

Date		Explanation		Units		Unit Cost		Total Cost
June 1		Inventory		130		$5		$ 650
12		Purchases		400		6		2,400
23		Purchases		220		7		1,540
30		Inventory		250

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

Weighted-average unit cost

$ 6.120

Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round answers to 0 decimal places, e.g. 125.)

		FIFO		LIFO		Average-cost
The cost of the ending inventory		$		$		$
The cost of goods sold		$		$		$

Answer 1

Calculation of Cost of goods available for sale

Date	Explanation	Units	Unit Cost	Total Cost
June 1	Beginning balance	130	$5	$650
June 12	Purchases	400	$6	2400
June 23	Purchases	220	$7	1540
		750		$4590

Unit sales= Total units-Ending inventory units

= 750-250= 500 units

Weighted average unit cost= Cost of goods available for sale/Total units

= $4590/750= $6.120 per unit

Weighted average unit cost

$6.120

FIFO Method

Cost of goods sold

Date	Explanation	Units	Unit Cost	Total Cost
June 1	Beginning balance	130	$5	$650
June 12	Purchases (500-130)	370	$6	2220
		500		$2870

Ending inventory= Cost of goods available for sale-Cost of goods sold

= $4590-2870= $1720

LIFO Method

Cost of goods sold

Date	Explanation	Units	Unit Cost	Total Cost
June 23	Purchases	220	$7	$1540
June 12	Purchases (500-220)	280	$6	1680
		500		$3220

Ending inventory= Cost of goods available for sale-Cost of goods sold

= $4590-3220= $1370

Average cost

Cost of goods sold= Unit sales*Weighted average unit cost

= 500*$6.120= $3060

Ending inventory= Cost of goods available for sale-Cost of goods sold

= $4590-3060= $1530

		FIFO		LIFO		Average-cost
The cost of the ending inventory		$1720		$1370		$1530
The cost of goods sold		$2870		$3220		$3060

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