Periodic Inventory by Three Methods The units of an item available for sale duri

Question

Periodic Inventory by Three Methods

The units of an item available for sale during the year were as follows:

There are 26 units of the item in the physical inventory at December 31. The periodic inventory system is used. Round average unit cost to one decimal and final answers to the nearest whole dollar, if required.

a. Determine the inventory cost by the first-in, first-out method.
$

b. Determine the inventory cost by the last-in, first-out method.
$

c. Determine the inventory cost by the weighted average cost method.
$

Jan. 1   Inventory 20 units @ $40 Feb. 17   Purchase 7 units @ $42 Jul. 21   Purchase 12 units @ $44 Nov. 23   Purchase 4 units @ $45

Explanation / Answer

A)

b)last-in, first-out method.

c) weighted average cost method

FIFO method Under FIFO method , Material bought in earlier will be used for production Therefore , Stock of 31 represents as follwos Quantity Price Jan-01 Opening 8 40 320 Feb. 17   Purchase 7 42 294 Jul. 21   Purchase 12 44 528 Nov. 23   Purchase 4 45 180 31 $ 1322

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