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Leno4ka [110]
3 years ago
13

Pina Colada Corp. had 150 units in beginning inventory at a total cost of $16,500. The company purchased 300 units at a total co

st of $60,000. At the end of the year, Pina Colada had 85 units in ending inventory.Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round average-cost per unit and final answers to 0 decimal places, e.g. 1,250.)
Business
2 answers:
Gemiola [76]3 years ago
7 0

Answer:

Total cost of goods sold(FIFO) = $59,500

Cost of ending inventory(FIFO) = $17,000

Total cost of goods sold(LIFO) = $67,150

Cost of ending inventory(LIFO) = $9,350

Total cost of goods sold(AVERAGE COST) = $62,050

Cost of ending inventory(AVERAGE COST) = $14,450

Explanation:

Given the following ;

Units in beginning inventory = 150

Total cost of beginning inventory = $16,500

Units in Purchased inventory = 300

Total cost of purchased inventory = $60,000

Units in ending inventory = 85

Therefore;

Cost per unit in beginning inventory = $16,500÷150 = $110

Cost per unit in purchased

inventory = $60,000÷300 = $200

Total unit sold = 150+300-85 = 365units

Using FIFO(First-in First-out) :

Here, price associated with first inventory is first adopted in selling until goods in the inventory is exhausted, then move on to the next inventory.

Total units sold = 365

Starting from first inventory ;

$110 × 150 = $16500

365 - 150 = 215 units

$200 × 215 = $43,000

Total cost of goods sold (FIFO) = $43,000 + $16,500 = $59,500

Cost of ending inventory (FIFO) = 85 × $200 = $17,000

Using LIFO(Last-in First-out)

Here, price associated with last inventory is first adopted in selling until goods in inventory is exhausted.

Total unit sold = 365

Starting from last inventory;

$200 × 300 = $60,000

365 - 300 = 65 units

$110 × 65 = $7150

Total cost of goods sold (LIFO) =

$60,000 + $7,150 = $67,150

Cost of ending Inventory (LIFO) =

85 × $110 = $9,350

Using average cost;

Here, Total cost of goods available for sale is divided by the total unit of goods.

Total cost of goods available for sale = $16,500 + $60,000 =$76,500

Total unit of goods = 150+300 = 450units

Average cost per unit = $76,500÷450 = $170

Total cost of goods sold = 365 × $170 = $62,050

Cost of ending inventory = 85 × $170 = $14,450

ICE Princess25 [194]3 years ago
5 0

Answer:

FIFO = $17,000

LIFO = $9,350

Average-cost = $14,450

Explanation:

Initial inventory: 150 units, at a total cost of $16,500 ($110 per unit).

Purchases: 300 units, at a total cost of $60,000 ($200 per unit).

Final inventory: 85 units.

Unit sold: 150+300-85=365 units

FIFO (first in, first out)

In this method, we considered that the units that were first in the inventory were sold first.

Initial inventory:  150 u. x $110 per unit = $16,500      $16,500

Variations:           300u. x $200 per unit = $60,000   $76,500

                          -150 u. x $110 per unit = -$16.500      $60,000

                          -215 u. x $200 per unit = -$43,000   $17,000

Final inventory      85 u. x $200 per unit = $17,000

LIFO (last in, first out)

In this method, we considered that the first units that leave the inventory are the last that have arrived.

Initial inventory:  150 u. x $110 per unit = $16,500       $16,500

Variations:           300u. x $200 per unit = $60,000    $76,500

                          -300 u. x $200 per unit = -$60,000   $16,500

                          -65 u. x $110 per unit = -$7,150           $  9,350

Final inventory      85 u. x $110 per unit = $9,350

Average cost

In this method, every unit that left the inventory is valuated with an average-cost per unit of the inventory.

Initial inventory:  150 u. x $110 per unit = $16,500       $16,500

Variations:           300u. x $200 per unit = $60,000    $76,500

                          -365 u. x <em>$170*</em> per unit = -$62,050   $14,450

Final inventory      85 u. x $170 per unit = $14,450

<em>*average cost = (150*110+300*200)/(150+300)=76500/450=$170</em>

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Month       Maintenance      Machine     Equation       MAPE

                 costs                   hours          error (Abs.)

1                $2,750                1,840           $269            9.78%

2               $2,910                 1,920           $197             6.77%

3               $3,060                2,000          $135              4.41%

4               $3,170                 2,020            $47              1.48%

5               $<u>3,250</u>                <u>2,050</u>                0                 0%

6               $3,220                2,030             $8             0.25%

7               $3,160                 2,010            $46              1.46%

8               $3,000                1,990           $184             6.13%

9               $2,770                1,850           $260            9.39%

10             <u>$2,370</u>                <u>1,250</u>                  0                 0%

11              $2,380                1,450             $210           8.82%

12             $2,600                1,740            $309           <u>11.88%</u>

                                                                                    60.37%

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Cost model = $995 + $1.10X

2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.

MAPE = 60.37% / 12 = 5.03%

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