Question

Larkspur, Inc. uses a periodic inventory system. Its records show the following for the month of May, in which 80 units were sold.

Date Explanation Units Unit Cost Total Cost
May 1 Inventory 28 $9 $252
15 Purchase 26 10 260
24 Purchase 39 11 429
Total 93 $941
Required:
1. Calculate the weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.)
2. Calculate the ending inventory at May 31 using the FIFO, LIFO and average-cost methods. (Round answers to 0 decimal places, e.g. 125.)

Answer 1

Step-by-step explanation:

Date Unit Unit cost Total Goods sold Cost Total

May 1 28 9 252 28 9 252

May 15 26 10 260 26 10 260

May 24 39 11 429 26 11 286

Total 93 941 80

1) Weighted average unit cost = 941/93 = $10.118

FIFO method

2)Ending inventory (93-80)*11 =$ 143

FIFO method assumes that the first set of inventory are the first to be sold

LIFO method

LIFO assumes that the last set of inventory are the first to be sold

Goods Sold Cost Total

39 11 429

26 10 260

15 9 135

Ending Inventory = (93-80)*9 = $117

Average Cost Method

Ending Inventory = 13 * 10.118 =$131.534