Question

Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 12 units at $5,400 $64,800 Aug. 7 Purchase 18 units at $6,000 108,000 Dec. 11 Purchase 15 units at $6,480 97,200 Available for sale 45 units $270,000 There are 14 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method. a. First-in, first-out (FIFO) method $ b. Last-in, first-out (LIFO) method $ c. Weighted average cost method $

Answer 1

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Jan. 1: Inventory 12 units at $5,400= $64,800

Aug. 7: Purchase 18 units at $6,000= $108,000

Dec. 11 Purchase 15 units at $6,480= $97,200

Available for sale 45 units $270,000

December 31: There are 14 units.

We need to determine the inventory cost using different cost methods.

A) FIFO (first-in, first-out)

Inventory= 14*6480= $90,720

B) LIFO (last-in, first-out)

Inventory= 12*5400 + 2*6000= $76,800

C) Weighted average cost method

Total inventory cost of the period= 64800 + 108000 + 97200= 270,000

Total units of the period= 45

Average cost= 207,000/45= $4600

Total inventory cot= 14*4600=$64400