Question

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.)	$	$

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