Question

The following data are for the Miller Corporation, which sells just one product: Units Unit Cost Beginning inventory January 1 200 $39 Purchases: February 11 500 $42 May 18 400 $49 October 23 100 $59 Sales March 1 400 July 1 400 Calculate the value of ending inventory and cost of goods sold using the periodic method and (a) first-in, first-out, (b) last-in, first-out, and (c) weighted-average cost method. Round your final answers to the nearest dollar. Cost of goods sold Ending inventory a FIFO b. LI

Answer 1

To ascertain the ending inventory and cost of goods sold for Miller Corporation, one must apply FIFO, LIFO, and the weighted-average cost methods. FIFO implies the oldest stock is sold first, LIFO assumes the reverse, and the weighted-average calculates a unit cost based on all inventory before sales. Specific calculations are necessary for actual amounts.

Step-by-step explanation:

To calculate the value of ending inventory and cost of goods sold (COGS) using the periodic method for Miller Corporation, we need to apply the first-in, first-out (FIFO), last-in, first-out (LIFO), and weighted-average cost method. For FIFO, we assume that the oldest inventory is sold first. Thus, the COGS would consist of the first 400 units sold from the beginning inventory and the February purchase, and the ending inventory would include the remaining units from the May and October purchases. With LIFO, we assume the newest inventory is sold first, meaning the COGS would be the cost of the most recent purchases (May and October), while the ending inventory would be from the earlier periods (beginning inventory and February). The weighted-average cost method involves calculating an average cost per unit of all inventory purchased before the sale, and then applying it to both COGS and the ending inventory. Note that the actual calculations require detailed steps and mathematical computation, which are not provided in this example but should be done to arrive at precise dollar amounts for each method.