Question

Inventory Costing Methods Morrison Inc. reported the following information for the month of October: Inventory, October...

Inventory Costing Methods

Morrison Inc. reported the following information for the month of October:

Inventory, October 1 58 units @ $26
Purchase:
October 7 52 units @ $27
October 18 72 units @ $29
October 27 42 units @ $31

During October, Morrison sold 143 units. The company uses a periodic inventory system.

Required:

What is the value of ending inventory and cost of goods sold for October under the following assumptions.

Assumption Cost of Goods Sold Ending Inventory
1. Of the 143 units sold, 49 cost $26, 36 cost $27, 54 cost $29, and 4 cost $31. $ $
2. FIFO $ $
3. LIFO $ $
4. Weighted average method (Round average unit cost to the nearest cent,
and round all other calculations and your final answers to the nearest dollar.)
$ $

Homework Answers

Answer #1

1. Value of ending inventory and cost of goods sold

Date Units Price Total Cost
01.10 58 26 1508
07.10 52 27 1404
18.10 72 29 2088
27.10 42 31 1302
Total (a) 224 6302
Cost of Goods Sold
49 26 1274
36 27 972
54 29 1566
4 31 124
Total (b) 143 3936
Ending inventory (a-b) 81 2366

2. Value of ending inventory and cost of goods sold under FIFO method

cost of goods sold = 58*26+52*27+33*29 = 3869

value of ending inventory = 39*29+42*31 = 2433

3. Value of ending inventory and cost of goods sold under LIFO method

cost of goods sold = 42*31+72*29+29*27 = 4173

ending inventory = 58*26+23*31 = 2221

4. Weighted average method

Weighted Average Unit Cost = 58*26+52*27+72*29+42*31 = 6302

= 6302/224 = 28.13

cost of goods sold = 143*28.13 = 4022.59

ending inventory = 81*28.13 = 2278.53

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