Question

Consider the following information for Maynor Company, which uses a periodic inventory system:

	Transaction	Units		Unit Cost			Total Cost
January 1	Beginning Inventory	31		$	81		$	2,511
March 28	Purchase	41			87			3,567
August 22	Purchase	62			91			5,642
October 14	Purchase	67			97			6,499
Goods Available for Sale		201					$	18,219

The company sold 67 units on May 1 and 62 units on October 28.

Required:

Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods.

1. FIFO
2. LIFO

LIFO

	Ending Inventory Cost of Goods Sold

1. Weighted Average

• Required C

Weighted Average (Round the per unit cost to two decimal places and then round your answers to the nearest whole dollar.)

	Ending Inventory Cost of Goods Sold

Answer 1

(a) FIFO :-

Ending Inventory	$6954
Cost of Goods sold	$11265

Ending Inventory :-

Units sold = 129

Total units available for sale = 201

Ending inventory = 201 units - 129 units = 72 units

Ending inventory consists 67 units from (october 14) & 5 units from (Aug 22)

   = (67 units * $97) + (5 units * $91) = $6954

Cost of goods sold :-

Cost of goods available for sale - Ending inventory

      = $18219 - $6954 = $11265

(b)

Ending Inventory	$6078
Cost of Goods sold	$12141

Ending Inventory :-

Units sold = 129

Total units available for sale = 201

Ending inventory = 201 units - 129 units = 72 units

Ending inventory consists 31 units from (Beginning Inventory) & 41 units from (March 28)

   = (31 units * $81) + (41 units * $87) = $6078

Cost of goods sold :-

Cost of goods available for sale - Ending inventory

      = $18219 - $6078 = $12141

(c)

Ending Inventory	$6526
Cost of Goods sold	$11693

Ending Inventory :-

Units sold = 129

Total units available for sale = 201

Ending inventory = 201 units - 129 units = 72 units

Weighted average cost per unit = Cost of goods available for sale/Goods available for sale

    = $18219/201 units = $90.64

Ending Inventory = 72 units * $90.64 = $6526

Cost of goods sold :-

Cost of goods available for sale - Ending inventory

      = $18219 - $6526 = $11693