Category Quantity Cost per Unit Total Cost Category Quantity Purchased Cost per

Question

Category

Quantity

Cost per Unit

Total Cost

Category

Quantity
Purchased

Cost per Unit

Quantity
Sold

Selling Price
per Unit

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(a1)

Calculate price index

Norman’s Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2014, Norman adopted dollar-value LIFO and decided to use a single inventory pool. The company’s January 1 inventory consists of:

Category

Quantity

Cost per Unit

Total Cost

Portable 7,000 $140 $ 980,000 Midsize 9,000 350 3,150,000 Flat-screen 3,300 560 1,848,000 19,300 $5,978,000
During 2014, the company had the following purchases and sales.

Category

Quantity
Purchased

Cost per Unit

Quantity
Sold

Selling Price
per Unit

Portable 15,700 $154 14,700 $210 Midsize 21,200 420 25,800 567 Flat-screen 10,300 700 7,000 840 47,200 47,500

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Calculate price index

Explanation / Answer

OPENING COST PER UNIT($)(1) COST PER UNIT OF PURCHASES($)(2) (3)=(1)+(2) PRICE INDEX(3)/2 PORTABLE 140 154 294 147 MIDSIZE 350 420 770 385 FLAT SCREEN 560 700 1260 630

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