In this problem it states that the ending inventory is 350. Wouldn't that mean that your units sold would be 1150 when your units available for sale are 1500? Wouldn't COGS be $ 109 400? for the FIFO method? Thus ending inventory $31 700? Thanks
This is Ch 6 25E from financial and managerial accounting for MBA 5th edition
Computing Cost of Sales and Ending Inventory
H Company has the following financial record for current period.
Ending inventory is 350 units. Compute ending inventory and COGS for current oeriod using FIFO, LIFO and AVG cost
Beginning Inventory |
150 |
$100 |
Purchase #1 |
600 |
$96 |
Purchase #2 |
500 |
$92 |
Purchase #3 |
250 |
$90 |
FIFO
ENDING INVENTORY GIVEN IN QUESTION = 350 UNITS. HENCE 100*92+250*90 = $31700
COGS = 150*100+600*96+400*92 = $109400
LIFO
ENDING INVENTORY GIVEN IN QUESTION = 350 UNITS. HENCE 150*100+200*96 = $34200
COGS = 250*90+500*92+400*96 = $106900
WEIGHTED AVERAGE (AVERAGE COST)
RATE PER UNIT = 150*100+600*96+500*92+250*90/(150+600+500+250) = 94.07
ENDING INVENTORY GIVEN IN QUESTION = 350 UNITS. HENCE 350*94.07 = $32924
COGS = (1500-350)94.07 = $108180
THANK YOU , PLEASE UPVOTE
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