Question

			Cost
		Inventory Method	Merchandise		Merchandise
			Inventory		Sold
	a.	FIFO	$7,728		$21,522
	b.	LIFO	6,660		22,590
	c.	Average cost	7,215
		Cost of merchandise available for sale:
			42		units at	$180		=	$      7,560
			58		units at	$195		=	11,310
			20		units at	$204		=	4,080
			30		units at	$210		=	6,300
			150		units				$    29,250
	a.	First-in, first-out:
		Merchandise inventory:
			30		units at	$210		=	6,300
			7		units at	$204		=	1,428
			37		units				$      7,728
		Merchandise sold							$    21,522
	b.	Last-in, first-out
		Merchandise inventory:
			37		units at	$180		=	$      6,660
		Merchandise sold							$    22,590
	c.	Average cost
		Average cost =	29,250		total cost /	150		total units
		=	$          195
		Merchandise inventory:
			37		units at	$195		=	$      7,215
		Merchandise sold							$

Answer 1

Merchandise sold can also be calculated as difference between total cost of Merchandise available for sale (i.e. $29,250 in this case) and cost of merchandise inventory

a) FIFO

Cost of merchandise Inventory = $7,728

Cost of merchandise sold = $29,250 - $7,728 = $21,522

b) LIFO

Cost of merchandise Inventory = $6,660

Cost of merchandise sold = $29,250 - $6,660 = $22,590

c) Average cost

Cost of merchandise Inventory = $7,215

Cost of merchandise sold = $29,250 - $7,215 = $22,035

or alternatively it can be calculated as follows:-

Units sold = 150 units - 37 units = 113 units

Average cost = $195

Cost of merchandise sold = Units sold*Average cost = 113 units*$195 = $22,035