B oyce Company\'s beginning inventory and purchases during the fiscal year ended
ID: 2472142 • Letter: B
Question
Boyce Company's beginning inventory and purchases during the fiscal year ended September 30, 20-2, were as follows:
Use the following information for the specific identification method.
There are 900 units of inventory on hand on September 30, 20-2. Of these 900 units:
Required:
Calculate the total amount to be assigned to the cost of goods sold for the fiscal year ended September 30, 20-2, and ending inventory on September 30, 20-2, under each of the following periodic inventory methods. For the weighted-average method, round the average unit cost to two decimal places. Round all final answers to the nearest dollar.
Cost of Goods Sold Cost of Ending Inventory 1. FIFO $ $ 2. LIFO $ $ 3. Weighted-average $ $ 4. Specific identification $ $Explanation / Answer
FIFO
Cost of ending inventory
= Cost of 500 units from the 7th purchase + Cost of 300 units from the 6th purchase + Cost of 100 units for the 5th purchase
= 500 units x $21.75 per unit + 300 units x $21 per unit + 100 units x $19 per unit
= $19075
Cost of goods sold
= cost of goods available for sale – cost of ending inventory
= $72400 - $19075
= $53325
LIFO
Cost of ending Inventory
= Cost of 400 units from beginning inventory + cost of 300 units from the 1st purchase + cost of 200 units from the 2nd purchase
= 400 units x $15/unit + 300 units x $16.50 per unit + 200 units x $17/unit
= $14350
Cost of goods sold
= cost of goods available for sale – cost of ending inventory
= $72400 - $14350
= $58050
Weighted Average:
Weighted average cost per unit
= (Total cost of the units available for sale)/ total number of units available for sale
= $72400 / 4000 units
= $18.10 / unit
Cost of the ending inventory = 900 units x $18.10 / unit = $16290
Cost of goods sold
= Cost of goods available for sale – cost of ending inventory
= $72400 - $16290
= $56110
Specific Identification Method:
Cost of ending inventory
= 50 units from beginning inventory + 300 units from 3rd purchase + 100 units from 4th purchase + 200 units from 5th purchase + 50 units from 6th purchase + 200 units from 7th purchase
= 50 * $15/unit + 300 x $17.25/unit + 100 units x $18/unit + 200 units x $19/unit + 50 units x $21 / unit + 200 units x $21.75/unit
= $16925
Cost of goods sold
= Cost of goods available for sale – cost of ending inventory
= $72400 - $16925
=$55475
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