Question

Benson Company is a manufacturing firm. Presented below is information concerning one of its products:

1/1	Beginning inventory	3,190	$10
2/12	Purchase	3,630	$15
3/2	Sale	2,640	$28
4/18	Purchase	4,950	$18
5/31	Sale	4,180	$30

Part A

Compute the cost of goods sold under the following situations:

Periodic system, FIFO cost flow

Perpetual system, FIFO cost flow

Periodic system, LIFO cost flow

Perpetual system, LIFO cost flow

Periodic system, weighted-average cost flow

Perpetual system, moving-average cost flow

Your answers must be submitted in an Excel file and must show all calculations used to arrive at the final answers.

Part B

Summarize the cost of goods sold in a one-page memo to Benson Corporation's CEO.

Answer 1

Cost of good sold as computed below:

FIFO-Periodic
Date	Cost of goods available for sale				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Jan-01	3,190		10	31,900	3,190		10	31,900
Purchases:
Feb-12	3,630		15	54,450	3,630		15	54,450				-
Apr-18	4,950		18	89,100					4,950		18	89,100
Total	11,770			175,450	6,820			86,350	4,950			89,100

FIFO-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Jan-01									3,190		10	31,900
Feb-12	3,630		15	54,450					3,190		10	31,900
									3,630		15	54,450
Mar-02					2,640		10	26,400	550		10	5,500
									3,630		15	54,450
Apr-18									550		10	5,500
	4,950		18	89,100					3,630		15	54,450
									4,950		18	89,100
May-31					550		10	5,500	4,950		18	89,100
					3,630		15	54,450
	8,580	-		143,550	6,820			86,350	4,950		18	89,100

LIFO-Periodic
Date	Cost of goods available for sale				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Jan-01	3,190		10	31,900					3,190		10	31,900
Purchases:
Feb-12	3,630		15	54,450	1,870		15	28,050	1,760		15	26,400
Apr-18	4,950		18	89,100	4,950		18	89,100
Total	11,770			175,450	6,820			117,150	4,950			58,300
LIFO-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Jan-01									3,190		10	31,900
Feb-12	3,630		15	54,450					3,190		10	31,900
									3,630		15	54,450
Mar-02					2,640		15	39,600	3,190		10	31,900
									990		15	14,850
Apr-18									3,190		10	31,900
	4,950		18	89,100					990		15	14,850
									4,950		18	89,100
May-31					4,180		18	75,240	3,190		10	31,900
									990		15	14,850
									770		18	13,860
	8,580	-		143,550	6,820			114,840	4,950		10	60,610

Weighted-Periodic
Date	Cost of goods available for sale				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Jan-01	3,190		10	31,900
Purchases:
Feb-12	3,630		15	54,450
Apr-18	4,950		18	89,100
Total	11,770		14.91	175,450	6,820		14.91	101,662.62	4,950		14.91	73,787.38
Moving average-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Jan-01									3,190		10	31,900
Feb-12	3,630		15	54,450					3,190		10	31,900
									3,630		15	54,450
									6,820		12.66	86,350
Mar-02					2,640		12.66	33,426	4,180		13	52,924
									4,180		13	52,924
Apr-18									4,180		13	52,924
	4,950		18	89,100					4,950		18	89,100
									9,130		15.56	142,024
May-31					4,180		16	65,023	4,950		16	77,001
	8,580	-		143,550	6,820			98,449	4,950		16	77,001

Cost of good sold

	Periodic	Perpetual
FIFO	86,350	86,350
LIFO	117,150	114,840
Weighted	101,663	98,449

Cost of good sold is less in case of FIFO and highest in case of LIFO.