Question

Whispering Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye.

Date		Transaction		Quantity		Price/Cost
1/1		Beginning inventory		2,100		$16
2/4		Purchase		3,100		23
2/20		Sale		3,600		39
4/2		Purchase		4,100		30
11/4		Sale		3,300		43

Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.)

Average-cost per unit

$

  

  

Compute cost of goods sold, assuming Whispering uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.)

				Cost of goods sold
(a)		Periodic system, FIFO cost flow		$
(b)		Perpetual system, FIFO cost flow		$
(c)		Periodic system, LIFO cost flow		$
(d)		Perpetual system, LIFO cost flow		$
(e)		Periodic system, weighted-average cost flow		$
(f)		Perpetual system, moving-average cost flow		$

Answer 1

Correct Answer:

Requirement 1:

Weighted Average Cost Per unit
Average Cost	$         24.5054

Working:

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	2100	$              16.00	$         33,600.0
Purchases	3100	$              23.00	$         71,300.0
Purchases	4100	$              30.00	$   1,23,000.00
Total	9300		$   2,27,900.00

Weighted Average Cost Per unit
Units		(A)	9300
Total Cost		(B)	$        2,27,900
Average Cost		(C=B/A)	$         24.5054

Requirement 2:

Cost of Goods Sold
A	FIFO(Periodic inventory)	$      1,55,900
B	FIFO(Perpetual Calculation	$      1,55,900
C	LIFO(Periodic Calculation)	$      1,87,400
D	LIFO (Perpetual Calculation)	$      1,78,300
E	Weighted Average (periodic)	$      1,69,087
F	Weighted Average (perpetual )	$      1,62,520

working:

Note: Periodic and Perpetual are same in case of FIFO method.

	FIFO
A	Total Units Available for sale			9300			$            2,27,900
	Units Sold			6900
	Ending Inventory Units			2400
	Valuation
	Cost of Goods Sold		2100		$               16.00		$         33,600.00
			3100		$               23.00		$               71,300
			1700		$               30.00		$         51,000.00
B	Cost of Goods Sold		6900	units			$            1,55,900
A-B	Ending Inventory		2400	units			$               72,000

	Periodic LIFO
A	Total Units Available for sale			9300			$            2,27,900
	Units Sold			6900
	Ending Inventory Units			2400
	Valuation
	Cost of Goods Sold		4100		$               30.00		1,23,000.00
			2800		$               23.00		64,400.00
B	Cost of Goods Sold		6900	units			$      1,87,400.00
A-B	Ending Inventory		2400	units			$         40,500.00

.

	Perpetual LIFO
A	Total Units Available for sale			9300			$            2,27,900
	Units Sold			6900
	Ending Inventory Units			2400
	Valuation
	Cost of Goods Sold		3100		$               23.00		71,300.00
			500		$               16.00		8,000.00
			3300		$               30.00		99,000.00
B	Cost of Goods Sold		6900	units			$      1,78,300.00
A-B	Ending Inventory		2400	units			$         49,600.00

	Periodic Weighted Average
A	Total Units Available for sale			9300			$      2,27,900.00
	Units Sold			6900
	Ending Inventory Units			2400
	Valuation
	Cost of Goods Sold		6900		$           24.5054		$      1,69,087.26
B	Cost of Goods Sold		6900	units			$      1,69,087.26
A-B	Ending Inventory		2400	units			$         58,812.74

Moving average cost
	Inventory balance	Total cost	Average cost for each units
01-Jan	$ 2,100.00	$    33,600.00	$           16.000
04-Feb	$ 5,200.00	$      1,04,900	$           20.173
20-Feb	$ 1,600.00	$    32,276.92	$           20.173
02-Apr	$ 5,700.00	$      1,55,277	$           27.242
04-Nov	$ 2,400.00	$    65,379.76	$        27.2416

	Weighted Average
A	Total Units Available for sale			9300			$      2,27,900.00
	Units Sold			6900
	Ending Inventory Units			2400
	Valuation
	Cost of Goods Sold		3600		$           20.1731		$         72,623.16
			3300		$           27.2416		$         89,897.28
B	Cost of Goods Sold		6900	units			$      1,62,520.44
A-B	Ending Inventory		2400	units			$         65,379.56

End of Answer.

Thanks