Question

Will the results in (a) be higher or lower than the results under FIFO and LIFO?

Whispering Winds Corp. uses the periodic inventory system and reports the following for the month of June. Units Unit Cost Total Cost June 1 Inventory 300 $4 $ 1,200 12 Purchase 600 9 5,400 23 Purchase 450 10 4,500 30 Inventory 150 Part 1 Calculate Weighted Average Unit Cost. (Round answer to 2 decimal places, e.g. 15.25.) Weighted Average Unit Cost $enter Weighted Average Unit Cost in dollars rounded to 2 decimal places eTextbook and Media Assistance Used Part 2 Compute the cost of the ending inventory and the cost of goods sold using the average-cost method. (Round answers to 0 decimal places, e.g. 1,250.) The ending inventory $enter a dollar amount rounded to 0 decimal places The cost of goods sold $enter a dollar amount rounded to 0 decimal places eTextbook and Media Part 3 Will the results in (a) be higher or lower than the results under FIFO and LIFO? Ending inventory is select an option higherlower higher lower than FIFO $enter a dollar amount and select an option higherlower higher lower than LIFO $enter a dollar amount . In contrast, cost of goods sold is select an option higherlower higher lower than FIFO $enter a dollar amount and select an option higherlower higher lower than LIFO $enter a dollar amount

Answer 1

Weighted Average Cost = Costs of goods available for sale / Units available for sale
Weighted Average Cost = (1200+5400+4500) /(300+600+450)	$                       8.22
	FIFO	LIFO	Average Cost
Ending Inventory	$                1,500.00	$        600.00	$      1,233
Cost of good sold	$                9,600.00	$   10,500.00	$      9,867
Ending inventory is lower than the FIFO $1500 and higher than LIFO $600
In contrast, cost of goods sold is  higher than FIFO ($ 9600 ) and  lower than LIFO ($10500).
FIFO
Beginning Inventory	$1,200
Purchases (June 12)	$5,400
Purchases (June 23)	$4,500
Cost of goods available for sale	$              11,100.00
Less: Ending inventory (150 × $10)	$               (1,500.00)
Cost of goods sold	$                9,600.00
LIFO
Beginning Inventory	$1,200
Purchases (June 12)	$5,400
Purchases (June 23)	$4,500
Cost of goods available for sale	$              11,100.00
Less: Ending inventory (150 × $4)	$                  (600.00)
Cost of goods sold	$              10,500.00
Average Cost
Beginning Inventory	$1,200
Purchases (June 12)	$5,400
Purchases (June 23)	$4,500
Cost of goods available for sale	$              11,100.00
Less: Ending inventory (150 × $8.22)	$               (1,233
Cost of goods sold	$                9,867