Question

# Buffalo Industries reports the following for the month of June. Date Explanation Units Unit Cost Total...

Buffalo Industries reports the following for the month of June.

 Date Explanation Units Unit Cost Total Cost June 1 Inventory 131 \$5 \$655 12 Purchases 359 6 2,154 23 Purchases 195 7 1,365 30 Inventory 267

A sale of 371 units occurred on June 15 for a selling price of \$8 and a sale of 47 units on June 27 for \$9.

Calculate the average cost per unit, using a perpetual inventory system. (Round answers to 3 decimal places, e.g. 5.125.)

 June 1 \$ June 12 \$ June 15 \$ June 23 \$ June 27 \$

Calculate cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 371 units occurred on June 15 for a selling price of \$8 and a sale of 47 units on June 27 for \$9. (Round answers to 0 decimal places, e.g. 125.)

 FIFO LIFO Moving-Average The cost of the ending inventory \$ \$ \$ The cost of goods sold \$ \$ \$

#### Homework Answers

Answer #1

Buffalo industries

Average cost :

 Date calculations per unit (\$) June 1 (131 units × \$ 5)/131 units \$ 5 June 12 ((131 units × \$ 5)+(359 units × \$ 6))/(131+359) units \$ 5.733 June 15 ((490-371)units × \$ 5.733)/(490-371) units \$ 5.733 June 23 ((490-371) units × \$ 5.733)+(195 units × \$ 7)/(490-371+195) units \$ 6.520 June 27 ((314-41) units × \$ 6.520)/(314-47) units \$ 6.520 June 30 same as June 27, because there is no Purchases in June 30 \$ 6.520

Ending inventory and cost of goods sold :

 FIFO LIFO Moving average Ending inventory (72 units × \$ 6)+(195 units × \$ 7) = \$ 1,797 (119 units × \$ 5)+(147 units × \$ 7) = \$ 1,624 267 units × \$ 6.520 = \$ 1,741 Cost of goods sold (131 units × \$ 5)+(240 units × 6)+(47 units × \$ 6) = \$ 2,377 (359 units × \$ 6)+(12 units × \$ 5)+(47 units × \$ 7) = \$ 2,543 (371 units × \$ 5.733)+(47 units × \$ 6.520) = \$ 2,433
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