Question

Presented below is information related to Blowfish radios for the Kingbird Company for the month of July.

Date		Transaction		Units In		Unit Cost		Total		Units Sold		Selling Price		Total
July 1		Balance		150		$ 3.70		$   555
6		Purchase		1,200		3.80		4,560
7		Sale								450		$ 6.80		$  3,060
10		Sale								450		7.10		3,195
12		Purchase		600		4.10		2,460
15		Sale								300		7.20		2,160
18		Purchase		450		4.20		1,890
22		Sale								600		7.20		4,320
25		Purchase		750		4.18		3,135
30		Sale								300		7.30		2,190
		Totals		3,150				$ 12,600		2,100				$ 14,925

(a1)

Correct answer iconYour answer is correct.

Calculate average cost per unit. (Round answer to 2 decimal places, e.g. 2.76.)

Weighted-average cost

$

Attempts: 1 of 3 used

(a2)

Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions. (Round answers to 0 decimal places, e.g. 6,578.)

(1) FIFO.
(2) LIFO.
(3) Weighted-average.

		(1) FIFO		(2) LIFO		(3) Weighted-Average
Ending Inventory at July 31		$		$		$

Answer 1

Solution a1:

Weighted average cost per unit = Cost of goods available for sale / Nos of units available for sale = $12,600 / 3150 = $4 per unit

Solution a2:

Nos of units in ending inventory = 3150 - 2100 = 1050 unis

FIFO:

Units in ending inventory will consist of 750 units from purchase on July 25 and 300 units from 18th july.

Cost of ending inventory = (300*$4.20) + (750*$4.18) = $4,395

LIFO:

Units in ending inventory will consist of 150 units from beginning inventory and 900 units from 6th july.

Cost of ending inventory = (150*$3.70) + (900*$3.80) = $3,395

Weighted average:

Cost of ending inventory = 1050 * $4 = $4,200