Question

June 1

June 12
• June 23
Jun 30
Inventory 150 unit cost 6$ total cost900$
purchase450 unit cost7$ total 3150$
Purchase400 unit cost 8$ total 3200$
Inventory 80

Assume a Sale of 500 units occured on June 15
for a Selling price of $9 and a sale of 420 units on
June 27 for $9

? The cost of goods available for Sale?
?calculate Moving-Average unit cost of for
June 1.
June12.
June 15.
June23.
June27.

?Calculate the cost of ending inventoryfor each cost flow assumption, using a
perpetual inventory System. Round average cost per Unit
3 decimal places.
on Round answer to 3 decimal

Answer 1

Explanation:

Cost of goods available for sale:

Starting inventory: 150 units * $6/unit = $900

Purchase on June 1: 450 units * $7/unit = $3150

Purchase on June 23: 400 units * $8/unit = $3200

Total cost: $900 + $3150 + $3200 = $7450

Moving Average Unit Cost:

June 1: $7450 / (150 + 450) = $7/unit (rounded to 3 decimal places)

June 12: $7450 / (150 + 450 + 400) = $7.36/unit (rounded to 3 decimal places)

June 15: $7450 / (150 + 450 + 400 + 500) = $7.51/unit (rounded to 3 decimal places)

June 23: $7450 / (150 + 450 + 400 + 500) = $7.51/unit (rounded to 3 decimal places)

June 27: $7450 / (150 + 450 + 400 + 500 + 420) = $7.43/unit (rounded to 3 decimal places)

Cost of ending inventory using perpetual inventory system:

FIFO: $7.51/unit * 80 units = $604 (rounded to 3 decimal places)

LIFO: $7/unit * 80 units = $560 (rounded to 3 decimal places)

Average Cost: $7.43/unit * 80 units = $594.4 (rounded to 3 decimal places)