Question

In: Accounting

The units of Manganese Plus available for sale during the year were as follows: Mar. 1...

The units of Manganese Plus available for sale during the year were as follows:

Mar. 1 Inventory 16 units @ $30 $ 480
June 16 Purchase 30 units @ $35 1,050
Nov. 28 Purchase 45 units @ $39 1,755
91 units $3,285

There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used.

a. Determine the inventory cost by the FIFO method.
$

b. Determine the inventory cost by the LIFO method.
$

c. Determine the inventory cost by the average cost methods. Round interim calculations and final answer to two decimal places.
$

Solutions

Expert Solution

  • Ending Inventory:
    [a] FIFO = $ 585
    [b] LIFO = $ 450
    [c] Average cost = $ 541.50
  • Workings

FIFO

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

16

$                30.00

$                            480.00

16

$               30.00

$                     480.00

0

$                 30.00

$                         -  

Purchases:

16 June

30

$                35.00

$                        1,050.00

30

$               35.00

$                 1,050.00

0

$                 35.00

$                         -  

28 Nov

45

$                39.00

$                        1,755.00

30

$               39.00

$                 1,170.00

15

$                 39.00

$                585.00

TOTAL

91

$                        3,285.00

76

$                 2,700.00

15

$                585.00

LIFO

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

16

$               30.00

$                            480.00

1

$               30.00

$                       30.00

15

$                 30.00

$                450.00

Purchases:

0

$                       -  

$                                     -  

16 June

30

$                35.00

$                        1,050.00

30

$               35.00

$                 1,050.00

0

$                 35.00

$                         -  

28 Nov

45

$                39.00

$                        1,755.00

45

$               39.00

$                 1,755.00

0

$                 39.00

$                         -  

TOTAL

91

$                        3,285.00

76

$                 2,835.00

15

$                450.00

Average Method

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

16

$                30.00

$                            480.00

Purchases:

0

$                       -  

$                                     -  

16 June

30

$                35.00

$                        1,050.00

28 Nov

45

$                39.00

$                        1,755.00

TOTAL

91

$              36.099

$                        3,285.00

76

$          36.1000

$                 2,743.60

15

$            36.1000

$                541.50


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