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

Bramble Distribution markets CDs of the performing artist Unique. At the beginning of October, Bramble had in beginning inventory 2,000 of Uniques CDs with a unit cost of $5. During October, Bramble made the following purchases of Uniques CDs.

Oct. 3		2,500	@	$6		Oct. 19		3,000	@	$8
Oct. 9		3,500	@	$7		Oct. 25		4,000	@	$9

During October, 10,800 units were sold. Bramble uses a periodic inventory system.

Determine the cost of goods available for sale.

Cost of goods available for sale

$

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

Cost per unit

$

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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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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, $ .

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