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22 July, 06:48

Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 12 units at $5,400 $64,800 Aug. 7 Purchase 18 units at $6,000 108,000 Dec. 11 Purchase 15 units at $6,480 97,200 Available for sale 45 units $270,000 There are 14 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method. a. First-in, first-out (FIFO) method $ b. Last-in, first-out (LIFO) method $ c. Weighted average cost method $

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  1. 22 July, 10:07
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    Instructions are listed below

    Explanation:

    Giving the following information:

    Jan. 1: Inventory 12 units at $5,400 = $64,800

    Aug. 7: Purchase 18 units at $6,000 = $108,000

    Dec. 11 Purchase 15 units at $6,480 = $97,200

    Available for sale 45 units $270,000

    December 31: There are 14 units.

    We need to determine the inventory cost using different cost methods.

    A) FIFO (first-in, first-out)

    Inventory = 14*6480 = $90,720

    B) LIFO (last-in, first-out)

    Inventory = 12*5400 + 2*6000 = $76,800

    C) Weighted average cost method

    Total inventory cost of the period = 64800 + 108000 + 97200 = 270,000

    Total units of the period = 45

    Average cost = 207,000/45 = $4600

    Total inventory cot = 14*4600=$64400
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