Ziad Company had a beginning inventory on January 1 of 278 units of Product 4-18

Question

Ziad Company had a beginning inventory on January 1 of 278 units of Product 4-18-15 at a cost of $18 per unit. During the year, the following purchases were made.

Mar. 15 740 units at $21 Sept. 4 648 units at $24 July 20 463 units at $22 Dec. 2 185 units at $27 Your answer is partially correct. Try again. Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (Round answers to 0 decimal places, e.g. 1,250.) IFO FO AVERAGE-COS The ending inventory 11133 10026 10282.24 The cost of goods sold 40144 42367 51277

Explanation / Answer

FIFO Method Cost of goods sold Unit Rate Total Sales from Beginning inventory                                            278       18     5,004 Sales from March 15th purchase                                            740       21 15,540 Sales from July 20th Purchase                                            463       22 10,186 Sales from sep 4th purchase 1,850-278-740-463 = 369       24     8,856 Cost of goods sold                                         1,850 39,586 Ending Inventory Balance inventory from Sep 4th Purchase 648-369 = 279       24     6,696 Balance inventory from Dec 2nd Purchase                                            185       27     4,995 Ending Inventory 11,691 LIFO Method Cost of goods sold Unit Rate Total Sale from December 2nd Purchase                                            185       27     4,995 Sales from sep 4th purchase                                            648       24 15,552 Sales from July 20th Purchase                                            463       22 10,186 Sales from March 15th purchase 1,850-185-648-463 = 554       21 11,634 Cost of goods sold                                         1,850 42,367 Ending Inventory Balance Inventory from 15th march purchase 740-554 = 186       21     3,906 Balance Inventory from Beginning inventory                                            278       18     5,004 Ending Inventory     8,910 Average Cost Unit Rate Total Beginning inventory      278       18     5,004 Mar. 15th Purchase      740       21 15,540 July 20th Purchase      463       22 10,186 Sept. 4th Purchase      648       24 15,552 December 2nd Purchase      185       27     4,995 Total Purchase 2,314 51,277 Average Cost per unit = 51,277/2,314 = 22.16 Cost of goods sold = 1,850*22.16 = $40,966 Ending Inventory = (2,314-1,850)*22.16 = $10,282.24

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