Units Unit Cost SHAMROCK COMPANY COMPUTATION OF INVENTORY FOR PRODUCT BAP UNDER

Question

Units

Unit Cost

SHAMROCK COMPANY
COMPUTATION OF INVENTORY FOR PRODUCT
BAP UNDER FIFO INVENTORY METHOD
March 31, 2017

Units

Unit Cost

Total Cost

SHAMROCK COMPANY
COMPUTATION OF INVENTORY FOR PRODUCT
BAP UNDER LIFO INVENTORY METHOD
March 31, 2017

Units

Unit Cost

Total Cost

Weighted-Average

Shamrock Company was formed on December 1, 2016. The following information is available from Shamrock’s inventory records for Product BAP.

Units

Unit Cost

January 1, 2017 (beginning inventory) 750 $ 8.00 Purchases:    January 5, 2017 1,500 9.00    January 25, 2017 1,625 10.00    February 16, 2017 1,000 11.00    March 26, 2017 750 12.00
A physical inventory on March 31, 2017, shows 2,000 units on hand.

Explanation / Answer

computing values under periodic inventory method:

1. FIFO

Value of ending inventory:

under FIFO ending inventory comes from latest purchases, hence 2000 units will be from latest purchases as below:

2. LIFO:

under LIFO ending inventory comes from opening balances and earliest purchases and value is below:

3. Weighted average system:

Average cost per unit= Total cost/ Total units

Date Units Unit cost Total Mar.26 750 12 9000 Feb.16 1000 11 11000 Jan.25* 250 10 2500 2000 22500 * balance units

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