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The following information is available from Jansen\'s inventory records for Prod

ID: 2464754 • Letter: T

Question

The following information is available from Jansen's inventory records for Product X:

      Units

Unit Cost

January 1, 2012 ( Beg. Inventory.)

       800

     $9.00

Purchases:

January 5, 2012

     1,300

    $10.00

January 25, 2012

     1,200

    $10.50

February 16, 2012

        500

    $11.00

March 26, 2012

        900

    $11.50

         A physical inventory on March 31, 2012 shows 1,600 units on hand

         REQUIRED:

         Compute the ending inventory (assuming periodic system) at March 31, 2012, under each of the following inventory methods:

(a) FIFO

(b)   LIFO

(c) Weighted Average

      Units

Unit Cost

January 1, 2012 ( Beg. Inventory.)

       800

     $9.00

Purchases:

January 5, 2012

     1,300

    $10.00

January 25, 2012

     1,200

    $10.50

February 16, 2012

        500

    $11.00

March 26, 2012

        900

    $11.50

Explanation / Answer

a) FIFO MEthod - Periodic

Units Available for sale = 800+1300+1200+500+900 = 4700

Ending Inventory units = 1600 units

units sold = 4700 - 1600 = 3100

Ending Inventory under FIFO method = 200x10.50+500x11+900x11.50 = 17950

b) LIFO method

Ending Inventory under LIFO method = 800 x10 +800x9 = $15200

c) Weighted Average

The Actual total cost of all purchases or beginning Inventory units = 800x9+1300x10+1200x10.50+500x11+900x11.50 = $48650

Weighted average Cost per unit = 48650/4700 = 10.35

Units in Ending Inventory = 1600 units

Ending Inventory = 1600x10.35 =$16560