Answer:
Total unit sold = Opening balance + Purhase in march + Purchase in August - Closing balance
Total unit sold = 2000 + 5000 +3000 - 4000
Total unit sold = 6000 units
1. FIFO method:
So total cost of goods sold is (2000*$5) + (4000*$6)= $34,000
Ending inventory value is (1000*$6) + (3000*$8) = $30,000
2. LIFO method:
So total value of goods sold is (3000*$8) + (3000*$6) = $42,000
Ending inventory value is (2000*6) + (2000*$5) = $22,000
3. Average cost of inventory:
Opening inventory (2000* $5) + Purchase on Mar.21 (5000*$6) + Purchase on August 1 (3000*$8) = $64,000
Total units = 2000 + 5000 + 3000
Total units = 10,000
Average cost is $64,000/10,000 (units) = $6.40 per unit
So, Cost of goods sold is 6000*$6.40 = $38,400
Ending Inventory value is 4000*$6.40 = $25,600
