Question

The accounting records of Tuel Electronics show the following data.Beginning inventory 3,880 units at $8Purchases 8,660 units at $10Sales 9,310 units at $13Determine cost of goods sold during the period under a periodic inventory system using the FIFO method, the LIFO method, and the average-cost method.(Round answers to 0 decimal places, e.g. 125.) FIFO LIFO Average-costCost of goods sold $ $ $

Answer 1

Answer:

FIFO

FIFO means First in First Out. This method values cost of sales at the earliest prices

Cost of Goods Sold = (3,880 units × $8) + (5,430 units × $10)

                                 = $85,340

LIFO

LIFO means Last in Fist Out. This method values cost of sales at the latest prices.

Cost of Goods Sold = (8,660 units × $10) + (650 units × $8)

                                 = $91,800

Weighted Average Cost

The unit cost is re-calculated with every new purchase of units made. The cost of sale will be valued on the newly calculated average unit cost.

Unit Cost = Total Cost ÷ Total Units

                = (3,880 units × $8) + (8,660 units × $10) / 12,540 units

                = $9.381

Cost of Goods Sold = Units Sold × Unit Cost

                                 = 9,310 units × $9.381

                                 = $ 87,337.11