Question

In this problem it states that the ending inventory is 350. Wouldn't that mean that your...

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

Homework Answers

Answer #1

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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