Question

Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a perpetual inventory system. The following are the transactions for the month of July.

Units Unit Cost
July 1 Beginning Inventory 2,700 $ 47
July 5 Sold 1,350
July 13 Purchased 6,700 51
July 17 Sold 3,700
July 25 Purchased 8,700 57
July 27 Sold 5,700
Calculate the cost of ending inventory and cost of goods sold assuming a perpetual inventory system is used in combination with
(a) FIFO and (b) LIFO.or (c) weighted average cost. (Round "Cost per Unit" to 2 decimal places.)
FIFO LIFO WEIGHTED AVERAGE COST
Cost of goods available for sale
Ending inventory
Cost of goods sold

Answer 1

Units Unit cost Total

July 1 2700 47 126900

July 13 6700 51 341700

July 25 8700 57 495900

Total 18100 964,500

Weighted Average Cost = $964,500/18,100 = $53.28

Ending Inventory units = 18100-1,350-3,700-5,700 = 7350

a. FIFO

Cost of Goods Available for Sale = $964,500

Ending Inventory = 7,350*$52 = $382,200

Cost of Goods Sold = $964,500 - $382,200 = $582,300

b. LIFO

Cost of Goods Available for Sale = $964,500

Ending Inventory = (2,700*$47)+(4,650*$51) = $364,050

Cost of Goods Sold = $964,500 - $364,050 = $600,450

c. Weighted average cost

Cost of Goods Available for Sale = $964,500

Ending Inventory = 7350*$53.28 = $391,608

Cost of Goods Sold = $964,500 - $391,608 = $572,892