Question

The accounting records of Pina Colada Corp. show the following data.

Beginning inventory		4,000 units at	$4
Purchases		8,500 units at	$6
Sales		10,000 units at	$9

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Calculate average unit cost. (Round answer to 3 decimal places, e.g. 5.125.)

Average unit cost

$enter average unit cost in dollars

per unit

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Determine cost of goods sold during the period under a periodic inventory system using the FIFO method, the LIFO method, and the average-cost method. (Round answers to 0 decimal places, e.g. 125.)

		FIFO		LIFO		Average-cost
Cost of goods sold		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount

Answer 1

>> Average Unit cost = [ ( 4,000 * $ 4 ) + ( 8,500 * $ 6 ) ] / ( 4,000 + 8,500 )

>> Average Unit cost = $ 5.36

:: FIFO Method

>> Cost of Goods sold = ( 4,000 * $ 4 ) + ( 6,000 * $ 6 )

>> Cost of Goods sold = $ 52,000.

:: LIFO Method

>> Cost of Goods sold = ( 8,500 * $ 6 ) + ( 1,500 * $ 4 )

>> Cost of Goods sold = $ 57,000.

:: Average cost Method

>> Cost of Goods sold = 10,000 * $ 5.36

>> Cost of Goods sold = $ 53,600