1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ExtremeBDS [4]
3 years ago
10

At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $10. A summary of purchases

during the current period follows. During the period, Chen sold 2,800 units.
Units Unit Cost Cost
Beginning Inventory 1,000 $10 $10,000
Purchase #1 1,800 11 19,800
Purchase #2 800 13 10,400
Purchase #3 1,200 15 18,000

a. Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance.
b. Assume that Chen uses the average cost method. Compute both cost of good sold for the current period and the ending inventory balance.
Business
2 answers:
jeka943 years ago
6 0

Answer:

a. Cost of Goods Sold under FIFO method - $ 29.800

   Ending inventory under FIFO method -     $ 28,400

b. Cost of Goods Sold under average cost method - $ 33,950

   Ending inventory under average cost method -     $ 24,250

Explanation:

                                                              Units     Unit Cost              Cost

Beginning Inventory                           1,000          $10               $10,000

Purchase #1                                          1,800         $ 11               $ 19,800

Purchase #2                                           800         $ 13              $ 10,400

Purchase #3                                         <u>1,200</u>         $ 15              <u>$ 18,000</u>          

Total available                                    4,800                            $ 58,200      

Units sold                                            ( 2,800)

Ending Inventory                                   2,000

Computations under FIFO method

In the FIFO method of cost flows, the cost of goods sold are considered from the opening inventory and the earlier purchases. The ending inventory is from the later purchases.

Cost of goods sold

Units sold                                            2,800

Opening inventory                             1,000 units @ $ 10          $ 10,000

Purchase # 1                                        1,800 units @ $ 11           <u>$ 19,800</u>

Total cost of Goods sold                                                           $ 29,800          

Ending Inventory

Units on hand                                      2,000

Purchase #2                                           800         $ 13              $ 10,400

Purchase #3                                         <u>1,200</u>         $ 15              <u>$ 18,000</u>          

Ending Inventory                                                                         $ 28,400

Computations under Average Cost method

Under average cost method, the cost of goods sold and the ending inventory is valued at the average cost of the goods available for sale divided by the number of units.

The average cost is calculated by dividing the total cost by the available units

Total Cost                                                       $ 58,200

Units available                                                     4,800

Average cost per unit                                    $      12.13    

Cost of goods sold = Units sold * Average cost = 2,800 * $ 12.13 =  $ 33,950

Ending Inventory- Units in hand * Average Cost = 2,000 * $ 12.13=  $ 24,250  

vladimir1956 [14]3 years ago
4 0

Answer:

(a) The cost of goods sold is $29, 800

The cost of closing inventory is $28, 400

(b) Cost of goods sold = $11 x 2, 800

     = $30 ,800

Cost of closing inventory = 2, 000 x $11

    = $22, 000

Explanation:

Below is a table of the data provided in the question

                  Units           Unit Cost ($)            Cost ($)

Beginning   1, 000               10                     10, 000

Purchase #1   1, 800               11                     19, 800

Purchase #2    800               13                     10, 400

Purchase #3   1, 200               15                     18, 000

<u>(a) First-In, First-Out (FIFO) method: </u>

FIFO method is a method used for the calculation of the cost of goods sold. This method assumes that the oldest products in a company’s inventory are sold first. The cost paid for the oldest inventory is the one used to calculate the cost of goods sold.

<u>How to calculate the cost of goods sold: </u>

• determine the cost of your oldest goods sold

• multiply that amount by the number of units sold

Answer: (a)

Units sold 2, 800 Unit cost Cost  

Opening inventory 1, 000 $10 $10, 000  

Purchase #1 1, 800 $11 $19, 800  

2, 800  $29, 800  

The cost of goods sold is $29, 800

<u>Closing inventory: </u>

Purchase #2          800      13       10, 400

Purchase #3         1, 200      15      <u> 18, 000 </u>

<u>T</u>otal                                         <u>28, 400 </u>

The cost of closing inventory is $28, 400

<u>(b) Average Cost Method: </u>

The average cost assigns a cost to inventory based on the total cost of goods purchased in a period divided by the total number of units purchased. This method is also known as the weighted average cost method.

<u>How to calculate the cost of goods sold: </u>

• find the average cost (divide the cost of all goods purchased, including opening inventory, by the number of goods on hand.

• Multiply that amount by the number of units sold

Average cost calculation:

               Units           Unit Cost ($)            Cost ($)

Beginning 1, 000                  10                  10, 000

Purchase #1 1, 800                  11                  19, 800

Purchase #2 800                          13                  10, 400

Purchase #3 <u>1, 200</u>                  15                   <u>8, 000 </u>

Total        <u> 4, 800</u>                                   <u>52, 800 </u>

Average cost = $52, 800 / 4, 800

= $11

Therefore,  

Cost of goods sold = $11 x 2, 800

     = $30 ,800

Closing inventory units = 4, 800 – 2, 800

     = 2, 000 units

Cost of closing inventory = 2, 000 x $11

    = $22, 000

Download docx
You might be interested in
Which of the following is likely to increase a country's gross domestic product (GDP)?
antiseptic1488 [7]

Answer: In macroeconomics, gross domestic product (GDP) is a macroeconomic magnitude that expresses the monetary value of the production of goods and services of final demand of a country or region during a determined period, normally one year or quarterly.

GDP can be measured by adding up all the final demands for goods and services in a given period. In this case, the destination of the production is being quantified. There are four major areas of spending: household consumption (C), government consumption (G), investment in new capital (I) and the net results of foreign trade (exports-imports).

And it can also be measured by adding the income of all the factors that contribute to the production process, such as wages and salaries, commissions, rents, copyrights, fees, interests, profits, etc. The GDP is the result of the calculation by means of the payment to the factors of the production. All this, before deducting tax.

Thus the statements "b. An increase in Social Security expenses" as government expenses, "c. An increase in retirement and pension benefits to elderly citizens" as subsidies or transfers, and " d. An individual receiving an annual performance bonus of $5,000" as financial interest are likely to increase a country GDP.

3 0
3 years ago
Read 2 more answers
Patricia made her career planning timeline in the year 2007. In what year
amm1812

Answer:

<h2>A. 2007 </h2>

Explanation:

Hope this is helpful

3 0
2 years ago
Which of the following are sections of the Schedule of Cost of Goods Manufactured? (You may select more than one answer.
Natasha2012 [34]

Answer:

C, D , E , F.

Explanation:

These all are connected with money.

Sorry if I don't get this right I never had this question before.

3 0
3 years ago
Low Carb Diet Supplement Inc. has two divisions. Division A has a profit of $134,000 on sales of $2,310,000. Division B is able
Genrish500 [490]

Answer:

a. Division A = 5.80 %, Division B = 8.95 %

b. Division B is superior. Because, it generates a greater profit margin per each sale made.

Explanation:

<u> a. Compute the profit margins</u>

Profit margin = Profit / Sales × 100

Division A = $134,000 / $2,310,000 × 100

                 = 5.80 % (2 decimal places.)

Division B = $33,400 / $373,000 × 100

                 = 8.95 % (2 decimal places.)

<u> b. Based on the profit margins</u>

Division B is superior as it generates a greater profit margin per each sale made.

8 0
2 years ago
Changing the prices of products based on the level of demand characteristics of the customer is called ________ pricing.
Airida [17]

Changing the prices of products based on the level of demand characteristics of the customer is called dynamic pricing.

Personalization is the use of customer data to create or modify items to meet individual needs. Customization is the manual modification of an item by a customer to meet their needs and requirements. Content streaming services are perhaps the most famous example of the subscription business model.

Internet technology reduces demand information costs by enabling price transparency (making it easier for consumers to find different prices) and cost transparency (making it easier for consumers to see the true cost of a product). and improve information quality.

Learn more about demand at

brainly.com/question/1222851

#SPJ4

6 0
1 year ago
Other questions:
  • Suppose you and a classmate are playing a game where your classmate proposes a division of​ $1.00. ​ Then, you either accept or
    12·1 answer
  • True or false the texas legislature is classified as highly professional, the highest level of institutionalization.
    15·1 answer
  • Neo-mercantilists equate political power with economic power and economic power with:______a. corruption.b. a balance-of-trade s
    13·1 answer
  • In the last 40 years, the number of women in the workforce has increased tremendously, and pay has also improved. In what ways i
    15·1 answer
  • Nevin negotiates a deal for the sale of twenty-five acres of farmland to Otis. Nevin promises to hold the offer open in return f
    8·1 answer
  • Do you feel that there is a difference in the quality of a private brand versus a national brand? Why or why not?
    8·1 answer
  • A firm that successfully differentiates its product or lowers its average cost of production creates A. a perfectly inelastic de
    14·1 answer
  • It costs Sheridan Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A fo
    12·1 answer
  • Difference between partial equilibrium and general equilibrium in the simplest form​
    15·1 answer
  • Although most people want maximum attainment of every economic goal, there is the operating reality of ________________________
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!