Question

# Calculate the average cost per unit, using a perpetual inventory system. Assume a sale of 420...

Calculate the average cost per unit, using a perpetual inventory system. Assume a sale of 420 units occurred on June 15 for a selling price of \$8 and a sale of 50 units on June 27 for \$9. (Round answers to 3 decimal places, e.g. 5.125.)

 Date Explanation Units 150 \$5 \$750 350 6 2,100 240 7 1,680 270

June 1 \$enter a dollar amount 5

June 12 \$enter a dollar amount 5.700

June 15 \$enter a dollar amount 5.700

June 23 \$enter a dollar amount 6.675

June 27 \$enter a dollar amount 6.675

(b1) 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 420 units occurred on June 15 for a selling price of \$8 and a sale of 50 units on June 27 for \$9. (Round answers to 0 decimal places, e.g. 125.)

Average cost:

 Date Calculation \$ per unit June 1 5.000 June 12 {(150×5)+(350×6)}/(150+350) 5.700 June 15 5.700* June 23 {(80×5.7)×(240×7)}/(80+240) 6.675 June 27 6.675*

* \$ per unit was same as previous date because there is no additions for the inventory.

Ending inventory = 270 units

Goods available for sale = (150+350+240) = 740 units

Using cost flow assumptions :

 FIFO LIFO Average cost Ending inventory (240 units × \$ 7 each)+(30 units × \$ 6 each) = \$ 1,860 (80 units × \$ 5 each)+(190 units × \$ 7 each) = \$ 1,730 270 units × \$ 6.675 each = \$ 1,802 Cost of goods sold {(150 units × \$ 5 each)+(270 units × \$ 6 each)} + (50 units × \$ 6 each) = \$ 2,670 {(350 units × \$ 6 each)+(70 units × \$ 5 each)} + (50 units × \$ 7 each) = \$ 2,800 (420 units × \$ 5.7 each)+(50 units × \$ 6.675 each) = \$ 2,728

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