Cost Flow Methods

The following three identical units of Item K113 are purchased during April:

	Item Beta		Units		Cost
April 2	Purchase		1		$136
April 15	Purchase		1		138
April 20	Purchase		1		140
Total			3		$414
Average cost per unit					$138	($414 3 units)

Assume that one unit is sold on April 27 for $186. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method.

	Gross Profit	Ending Inventory
a. First-in, first-out (FIFO)	$fill in the blank 1	$fill in the blank 2
b. Last-in, first-out (LIFO)	$fill in the blank 3	$fill in the blank 4
c. Weighted average cost	$fill in the blank 5	$fill in the blank 6

The following units of an item were available for sale during the year:

Beginning inventory	28 units at $48
Sale	25 units at $67
First purchase	24 units at $50
Sale	16 units at $67
Second purchase	29 units at $52
Sale	17 units at $69

The firm uses the perpetual inventory system, and there are 23 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO?  

b. What is the total cost of the ending inventory according to LIFO? 

Answer rating: 100% (QA)

Cost Flow Methods Gross Profit and Ending Inventory We will calculate the gross profit and ending in... View the full answer