Question

Crane Company reports the following for the month of June.

				Units			Unit Cost			Total Cost
June 1		Inventory		200			$4			$ 800
12		Purchase		400			5			2,000
23		Purchase		400			6			2,400
30		Inventory		100

Calulate Weighted Average Unit Cost. (Round answer to 2 decimal places, e.g. 15.25.)

Weighted Average Unit Cost

$

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Compute the cost of the ending inventory and the cost of goods sold using the average-cost method. (Round answers to 0 decimal places, e.g. 1,250.)

The ending inventory		$
The cost of goods sold		$

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Will the results in (a) be higher or lower than the results under FIFO and LIFO?

Ending inventory is                                                                       higherlower than FIFO $   and                                                                       higherlower than LIFO $  .

In contrast, cost of goods sold is                                                                       higherlower than FIFO $   and                                                                       higherlower than LIFO $  .

Answer 1

	1-Jun	Inventory	200	*	4	=	800
	12-Jun	Purchase	400	*	5	=	2000
	23-Jun	Purchase	400	*	6	=	2400
		total	1000				5200
	Weighted average unti cost			5.2
	The ending inventory			520
	The cost of goods sold			4680
	ending inventory		is lower than FIFO and higher than LIFO
	in contrast cost of goods sold is higher than FIFO and lower than LIFO