Presented below is information related to Blowfish radios for the Hootie Company

Question

Presented below is information related to Blowfish radios for the Hootie Company for the month of July. Date Transaction Units In Unit Cost Total Units Sold Selling Price Total 1-Jul Balance 110 $3.86 $  425 6 Purchase 880 3.57 3,142 7 Sale 330 $7.00 $ 2,310 10 Sale 330 7.36 2,429 12 Purchase 440 4.85 2,134 15 Sale 220 7.57 1,665 18 Purchase 330 5.12 1,690 22 Sale 440 7.8 3,432 25 Purchase 550 5.05 2,778 30 Sale 220 8.04 1,769    Totals 2,310 $10,169 1,540 $11,605 Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions. (Round answers to 0 decimal places, e.g. 6,578.) (1) FIFO. (2) LIFO. (3) Weighted-average Presented below is information related to Blowfish radios for the Hootie Company for the month of July. Date Transaction Units In Unit Cost Total Units Sold Selling Price Total 1-Jul Balance 110 $3.86 $  425 6 Purchase 880 3.57 3,142 7 Sale 330 $7.00 $ 2,310 10 Sale 330 7.36 2,429 12 Purchase 440 4.85 2,134 15 Sale 220 7.57 1,665 18 Purchase 330 5.12 1,690 22 Sale 440 7.8 3,432 25 Purchase 550 5.05 2,778 30 Sale 220 8.04 1,769    Totals 2,310 $10,169 1,540 $11,605 Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions. (Round answers to 0 decimal places, e.g. 6,578.) (1) FIFO. (2) LIFO. (3) Weighted-average

Explanation / Answer

(1) Valuation of Inventory under FIFO Method

Balance                                          110 units

Add:

Purchases during the month   2200 Units

                                                       2310 Units

Less:

Sale during the month              1540 Units

Inventory on 31st July                770 Units

Thus cost of ending inventory will be;

550 units @ 5.05 each   = $2777

220 units @ 5.12 each =   $1126

Cost of ending inventory using FIFO = $3903

(2) Valuation of Inventory under LIFO Method

Balance                                          110 units

Add:

Purchases during the month   2200 Units

                                                       2310 Units

Less:

Sale during the month              1540 Units

Inventory on 31st July                770 Units

Thus cost of ending inventory will be;

110 units @ 3.86 each   = $425

660 units @ 3.57 each =   $2356

Cost of ending inventory using LIFO = $2781

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