SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO FIFO LIFO AVERAGE-COST Dunbar D
ID: 2480911 • Letter: S
Question
SHOW LIST OF ACCOUNTS
LINK TO TEXT
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FIFO
LIFO
AVERAGE-COST
Dunbar Distribution markets CDs of numerous performing artists. At the beginning of March, Dunbar had in beginning inventory 3,420 CDs with a unit cost of $10. During March, Dunbar made the following purchases of CDs.March 5 2,736 @ $11 March 21 6,840 @ $14 March 13 4,788 @ $12 March 26 2,736 @ $15
During March 16,416 units were sold. Dunbar uses a periodic inventory system. (a) Determine the cost of goods available for sale.
The cost of goods available for sale $
(b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)
Average Cost $
SHOW LIST OF ACCOUNTS
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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. 125.)FIFO
LIFO
AVERAGE-COST
The ending inventory $ $ $ The cost of goods sold $ $ $Explanation / Answer
Answer a - Determination of cost goods available for sale under periodic inventory system Cost of goods available for sale = Beginning Inventory + Purchases - cost of goods sold Cost of goods available for sale = $34200 + $224352 - ($11.125*416 CDs) = $253924 Answer b - Determination of Average cost CDs available for sale = 3420 + 17100 - 416 = 20104 CDs Average cost = Cost of goods available for sale / No.of CDs available for sale = $253924 / 20104 = $12.63 per CD Working Purchases Date No.of CDs Rate per CD Total Mar-05 2736 11 30096 Mar-13 4788 12 57456 Mar-21 6840 14 95760 Mar-26 2736 15 41040 Total 17100 224352 Average cost on inventory available for sale on March 16 = (Beginning Inventory cost + Purchases on March 5 & March 13) / No.of CDs Average cost on inventory available for sale on March 16 = [(3420 * $10)+ ($30096 + $57456)] / (3420 + 2736+4788) Answer c - Determination of Ending Inventory and cost of goods sold under FIFO,LIFO and average cost FIFO LIFO Average cost Ending Inventory $2,54,392.00 $2,53,560.00 $2,53,924.00 The cost of goods sold $4,160.00 $4,992.00 $4,628.00
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