Question

Bridgeport Corp. reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 116 $5 $ 580 12 Purchases 385 6 2,310 23 Purchases 194 7 1,358 30 Inventory 240 Calculate weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average unit cost $enter weighted-average unit cost in dollars rounded to 3 decimal places eTextbook and Media Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round answers to 0 decimal places, e.g. 125.) FIFO LIFO Average-cost The cost of the ending inventory $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places The cost of goods sold $enter a dollar amount rounded to 0 decimal places

Answer 1

First Part

Weighted-average unit cost = $6.112 (3 decimal places)

Second Part

Cost of Ending Inventory Cost of Goods Sold

a. FIFO $1,634 $2,614

b. LIFO $1,324 $2,294

c. Weighted Average $1,467 $2,781

Step-by-step explanation:

First, calculate the number of units sold

Number of units sold = Units available for sale - Units in ending inventory

= (116 + 385 + 194) - 240

= 455 units

Weighted-average Method, calculates a new unit cost with every purchase of Inventory. Sales are then made at the new calculated unit cost.

Unit Cost = Total Costs ÷ Total Units

Calculate weighted-average unit cost

Unit Cost = ($ 580 + $2,310 + 1,358)/ (116 + 385 + 194)

= $6.112 (3 decimal places)

a. FIFO

FIFO stands for First In First Out

i. Cost of Ending Inventory

46 units × $6 = $276

194 units × $7 = $1,358

Total = $1,634

ii. Cost of Goods Sold

116 units × $5 = $580

339 units × $ 6 =$2,034

Total = $2,614

b. LIFO

LIFO stands for Last In First Out

i. Cost of Ending Inventory

116 units × $5 = $580

124 units × $6 = $744

Total = $1,324

ii. Cost of Goods Sold

194 units × $7 = $1,358

261 units × $ 6 = $1,566

Total = $2,294

c. Weighted Average Method

i. Cost of Ending Inventory

Ending Inventory = Units in Ending Inventory × Average Unit Cost

= 240 units × $6.112

= $1,467

ii. Cost of Goods Sold

Cost of Goods Sold = Units Sold × Average Unit Cost

= 455 units × $6.112

= $2,781