Question

The following relates to ABC Company’s inventory for April: Date Description 4/1 Beginning Inventory 4/5 Purchases...

The following relates to ABC Company’s inventory for April: Date Description 4/1 Beginning Inventory 4/5 Purchases 4/18 Purchases 4/30 Ending inventory Units 1,500 2,500 1,000 1,800 Unit cost $10 $11 $12 Batch cost $15,000 $27,500 $12,000 Calculate cost of goods available for sale for April _____________________ Calculate the cost of goods sold under the following methods: ________________ FIFO ________________ Average Calculate cost of ending inventory under the following methods: ________________ LIFO ________________ Average

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Homework Answers

Answer #1

Calculation of Cost of goods available for sale

= Value of opening stock + purchases

=15000 + 27500 + 12000

=$54500

Calculation of COGS

FIFO

Units COGS amount
Out of beginning inventory 1500 1500*10=15000
Out of 4/5 purchases 1700 1700*11=18700
Total COGS =$33700

AVERAGE METHOD

Weighted avg cost per unit = Cost of goods available for sale/ no of goods available for sale

=54500/(1500+2500+1000) =$10.9 per unit

COGS = 3200 units * 10.9 =$34880

ENDING INVENTORY

LIFO

Units Ending inventory
Out of beginning inventory 1500 1500*10=15000
Out of 4/5 purchases 300 300*11=3300
Ending inventory =$18300

AVERAGE

ENDING inventory = 1800 *10.9 =$19620

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