Question

Computing COGS using Weighted Average Method:

1-1-18 - Beginning Inventory of 8 Cameras at cost of $10 each
1-8-18 - Sold 3 Cameras
1-16-10 - Purchase 5 Cameras at cost of $12 each
1-20-18 - Sold 8 Cameras
1-30-18 - Purchase 7 Cameras at cost of $14 each
Ending Inventory = 9 cameras
Cameras Sold = 11 cameras
* Calculate COGS using LIFO Method
* Calculate Ending Inventory using LIFO Method

Answer 1

To calculate COGS using the LIFO method, calculate the cost of cameras sold and the total cost of cameras purchased. Subtract the cost of cameras sold from the total cost of cameras purchased to calculate the ending inventory (COGS). The COGS using the LIFO method is $148. To calculate the Ending Inventory using the LIFO method, subtract the cost of cameras sold from the total cost of cameras purchased. The Ending Inventory using the LIFO method is 9 cameras valued at $90.

Step-by-step explanation:

The COGS (Cost of Goods Sold) can be calculated using the LIFO (Last-In, First-Out) method. To calculate COGS, we need to calculate the cost of the cameras sold first. Since this method assumes that the last item purchased is the first one sold, the cost of the 3 cameras sold on 1-8-18 and the 8 cameras sold on 1-20-18 would be calculated based on the cost of the most recent purchases. Then, we can calculate the ending inventory by subtracting the cost of the cameras sold from the total cost of the cameras purchased during the period.

To calculate COGS:

1. Calculate the cost of the cameras sold on 1-8-18 and 1-20-18 using the most recent purchases:

• 3 Cameras sold on 1-8-18: $12 x 3 = $36
• 8 Cameras sold on 1-20-18: $14 x 8 = $112

Calculate the total cost of the cameras purchased during the period:

• Beginning Inventory: 8 cameras x $10 each = $80
• 5 Cameras purchased on 1-16-18: $12 x 5 = $60
• 7 Cameras purchased on 1-30-18: $14 x 7 = $98
• Total cost of cameras purchased: $80 + $60 + $98 = $238

Subtract the cost of the cameras sold from the total cost of the cameras purchased to calculate the ending inventory (COGS):

• Ending Inventory = Total Cost of Cameras Purchased - Cost of Cameras Sold
• Ending Inventory = $238 - ($36 + $112) = $90

The COGS using the LIFO method is $148.

To calculate the Ending Inventory using the LIFO method:

1. Calculate the cost of the cameras sold on 1-8-18 and 1-20-18 using the most recent purchases:

• 3 Cameras sold on 1-8-18: $12 x 3 = $36
• 8 Cameras sold on 1-20-18: $14 x 8 = $112

Subtract the cost of the cameras sold from the total cost of the cameras purchased to calculate the ending inventory:

• Ending Inventory = Total Cost of Cameras Purchased - Cost of Cameras Sold
• Ending Inventory = $238 - ($36 + $112) = $90

The Ending Inventory using the LIFO method is 9 cameras valued at $90.