Question

Periodic Inventory by Three Methods

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	6 units at $26
Feb. 17	Purchase	12 units at $28
Jul. 21	Purchase	19 units at $29
Nov. 23	Purchase	18 units at $31

There are 5 units of the item in the physical inventory at December 31. The periodic inventory system is used. Round average unit cost to one decimal and final answers to the nearest whole dollar, if required.

a. Determine the inventory cost by the first-in, first-out method.
$

b. Determine the inventory cost by the last-in, first-out method.
$

c. Determine the inventory cost by the weighted average cost method.
$

Answer 1

	Units	Unit cost	Total
Jan. 1	6	26	156
Feb. 17	12	28	336
Jul. 21	19	29	551
Nov. 23	18	31	558
Total	55		1601
Average unit cost = 1601/55 = $29.1
a
Inventory cost by the first-in, first-out method = 5*31= $155
b
Inventory cost by the last-in, first-out method = 5*26= $130
c
Inventory cost by the weighted average cost method = 5*29.1= $146 or $145