Use the following information for problems #35-40
HuCo begins operations in 20X4, uses the periodic method and makes the following merchandise purchases:
20X4 Total Units Unit Cost Total Cost
April 900 $6 $5,400
September 1,300 7 9,100
20X5
March 1,100 $8 $8,800
November 500 10 5,000
39. If HuCo uses FIFO costing and sold 1,800 units each year, what is its 20X5 cost of goods sold?
A.) $14,200 B.) $10,700 C.) $14,600 D.) $10,300
40. HuCo, which used weighted average costing, has 700 units in 20X4 ending inventory. If HuCo sells 1,600 units in 20X5, what is its cost of goods sold (round unit costs in the computation to the nearest penny)?
A.) $13,800 B.) $11,040 C.) $11,760 D.) $12,816
Req 39. | |||||
Answer is C. 14600 | |||||
Explanation: | |||||
Beginning Inventory as per FIFO in 400 units @ 7: 2800 | |||||
Purchase of Mar1: 1100 units @8: 8800 | |||||
Purchase of Nov: 500 units @ 10: 5000 | |||||
Cost of goods sold for 2015: | |||||
Beginning inventory | 2800 | ||||
Purchase of Mar | 8800 | ||||
Purchase of Nov 300 units | 3000 | ||||
COGS | 14600 | ||||
Req 40. | |||||
Answer is D. $ 12816 | |||||
Explanation: | |||||
Average cost of 2004 (5400+9100)/2200 = 6.591 | |||||
2005 | |||||
Average cost per unit (700*6.591+8800+5000)/2300 = 8.006 | |||||
COGS for 2005: 1600*8.006 = 12810 |
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