Question

Calculate cost of goods sold and ending inventory for Emergicare’s bandages orders using FIFO, LIFO and average cost. There are 34 units in ending inventory. (Do not round intermediate calculations, such as average cost per unit values. Round your answers to the nearest cent.) Date unit per/unit Total cost January 1 51 $8.50 $433.50 April 1 46 7.75 356.50 June 1 61 7.50 457.50 September 1 56 7.50 448.00 Total 214 $ 1,695.50 Cost of goods sold Ending inventory FIFO $ ____________ _______________ LIFO $ $ ______________ ______________ Average cost $ $ ______________ ______________

Answer 1

Using FIFO, the COGS for Emergicare's bandages is $1,313.50 and the Ending Inventory is $382.00. LIFO results in a COGS of $1,385.50 and an Ending Inventory of $310.00. The Average Cost method gives a COGS of $1,429.41 and an Ending Inventory value of $269.52.

Step-by-step explanation:

To calculate the Cost of Goods Sold (COGS) and Ending Inventory for Emergicare's bandages orders using FIFO, LIFO, and Average Cost methods, we'll have to first account for the inventory raised at different times and prices.

FIFO (First-In, First-Out)

Under FIFO, we sell the oldest items first. Hence, for the COGS, we start by subtracting the ending inventory (34 units) from the total units to find out how many units were sold, then multiply by the cost of those specific units. COGS under FIFO is $1,313.50, and the Ending Inventory, calculated using the most recent purchase prices, is $382.00.

LIFO (Last-In, First-Out)

With LIFO, we sell the newest items first. The calculation follows a similar pattern as FIFO, but we start from the most recent purchases for COGS. The COGS under LIFO is $1,385.50, while the Ending Inventory, using the oldest purchase prices, is $310.00.

Average Cost

Here, we average out the cost of all units, which is $1,695.50 / 214 units = $7.9215 per unit. We then multiply the averaged cost with the units sold for COGS and the units in ending inventory. This yields a COGS of $1,429.41 and an Ending Inventory value of $269.52.

Answer 2

The cost of goods sold and ending inventory for Emergicare bandages using FIFO are $1,412.50 and $255.00 respectively, using LIFO are $1,404.00 and $697.00 respectively, and using the average cost method are $1,426.22 and $269.28 respectively.

Step-by-step explanation:

Calculating Cost of Goods Sold (COGS) and Ending Inventory

To calculate the cost of goods sold (COGS) and ending inventory using FIFO, LIFO, and average cost methods, we begin with the given inventory purchase data and apply different accounting principles for each calculation. Since we are given a specific number of units in ending inventory (34 units), we use this figure to determine the remaining inventory and the cost associated with it.

FIFO (First-In, First-Out)

Using FIFO, we sell the oldest items first. The 34 units in ending inventory would be the most recent purchases. Starting from the latest purchase:

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Ending inventory value: $255.00

The COGS would be the cost of the other (214 - 34 = 180) units:

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COGS: $1,412.50
LIFO (Last-In, First-Out)

Using LIFO, the last items purchased are the first ones sold. Therefore, the 34 units in ending inventory would come from the earliest purchases:

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Ending inventory value: $697.00

COGS would be the cost of the other (214 - 34 = 180) units:

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COGS: $1,404.00

Average Cost Method

The average cost per unit is calculated by dividing the total cost of goods available for sale by the total number of units available for sale.

Total cost / Total units = $1,695.50 / 214 units = $7.92 (average cost per unit)

For the ending inventory of 34 units:

34 units x $7.92 = $269.28

Ending inventory value: $269.28

COGS would be the cost of the other (214 - 34 = 180) units:

180 units x $7.92 = $1,425.60

COGS: $1,426.22