Question

1. A company made the following merchandise purchases and sales during the current month:

July 1 purchased 380 units at $15 each

July 5 purchased 270 units at $20 each

July 9 sold 400 units at $60 each

July 14 purchased 300 units at $24 each

July 20 sold 350 units at $60 each

July 30 purchased 250 units at $30 each

There was no beginning inventory.

What is the Cost of Goods Sold for each sale under FIFO, LIFO and Weighted Average

Answer 1

date of sale	units sold	FIFO	LIFO	WEIGHTED AVERAGE
july 9	400	380x$15+20x$20=$6100	270x$20+130x$15=$7350	400x$21.5=$8600
july 20	350	250x$20+100x$24=$7400	300x$24+50x$20=$8200	350x$21.5=$7525
total cost of goods sold		$13500	$15550	$16125

1.weighted average cost per unit =(380x$15+270x$20+300x$24+250x$30)/1200 units=$21.5

2.under FIFO method,the items will sell on first in first out basis,hence cost of goods sold will contain cost of items of first purchase and then subsequent purchase and in LIFO method it is just oposit to FIFO method