Answer:
Explanation:
For computing each part, first we have to determine the sale units i.e
= (Opening units + purchased units) - closing units
= (12 units + 27 unit + 20 units + 25 units) - 30 units
= 54 units
a. The cost of goods sold under FIFO is
Since 54 units are sold and in this starting units would be considered
So 12 units would be taken at $11 each, 27 units would be taken at $15, and the remaining units i.e. 15 units would be taken at $20
So,
= 12 units × $11 + 27 units × $15 + 15 units × $20
= $132 + $405 + $300
= $837
b. The cost of goods sold under LIFO is
Since 54 units are sold and in this ending units would be considered
So 25 units would be taken at $23 each, 20 units would be taken at $20, and the remaining units i.e. 9 units would be taken at $15
So,
= 25 units × $23 + 20 units × $20 + 9 units × $15
= $575 + $400 + $135
= $1,110
c. The average unit cost is
= (12 units × $11) + (27 units × $15) + (20 units × $20) + (25 units × $23) ÷ (12 units + 27 units + 20 units + 25 units)
= ($132 + $405 + $400 + $575) ÷ (84 units)
= $18 per unit
d. The cost of goods sold under the average cost is
= $18 per unit × 54 units
= $972
