Problem 6-02A a, b1-b2, c (Part Level Submission) (Video)

Glee Distribution markets CDs of the performing artist Unique. At the beginning of October, Glee had in beginning inventory 2,000 of Uniques CDs with a unit cost of $7. During October, Glee made the following purchases of Uniques CDs.

Oct. 3		2,500	@	$8		Oct. 19		3,000	@	$10
Oct. 9		3,500	@	$9		Oct. 25		4,000	@	$11

During October, 10,900 units were sold. Glee uses a periodic inventory system.

(a)

	Your answer is correct.

Determine the cost of goods available for sale.

Cost of goods available for sale

$

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(b1)

	Your answer is correct.

Calculate cost per unit. (Round answer to 2 decimal places, e.g. 2.25.)

Cost per unit

$

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(b2)

	Your answer is correct.

Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 1,250.)

FIFO

LIFO

AVERAGE-COST

The ending inventory

$

$

$

The cost of goods sold

$

$

$

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(c)

Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement?

(1)		FIFOLIFOAverage-cost produces the highest inventory amount, $ .
(2)		FIFOLIFOAverage-cost produces the highest cost of goods sold, $ .