QUESTION 3 Not complete Points out of 4.00 P Flag question Computing Cost of Sal

Question

QUESTION 3 Not complete Points out of 4.00 P Flag question Computing Cost of Sales and Ending Inventory Stocken Company has the following financial records for the current period. Purchases: #1 #2 #3 Units Unit Cost Beginning Inventory0$46 42 38 36 650 550 200 Ending inventory is 350 units. Compute the ending inventory and the cost of goods sold for the current period using (a) first-in, first out, (b) average cost, and (c) last-in, first out. (a) First-in, first-out Ending inventory Cost of goods sold $ (b) Average cost Ending inventory Cost of goods sold $ (c)Last-in, first-out Ending inventory Cost of goods sold$ Check

Explanation / Answer

Answer a First in First Out Ending Inventory will consist of units from latest purchases. Ending Inventory = (200 units * $36)+(150 units * $38) = $12,900 Cost of goods sold Beginning Inventory $4,600 Add: Purchases $55,400 Less: Ending Inventory $12,900 Cost of goods sold $47,100 Answer b Average Cost Ending Inventory will consist of units from latest purchases. Average Cost per unit = (Beginning Inventory cost+Purchases)/Total Units = ($4600+$55400)/1500 units = $40 per unit Ending Inventory = 350 units * $40 per unit = $14,000 Cost of goods sold Beginning Inventory $4,600 Add: Purchases $55,400 Less: Ending Inventory $14,000 Cost of goods sold $46,000 Answer c Last in First Out Ending Inventory will consist of units from old purchases. Ending Inventory = (100 units * $46)+(250 units * $42) = $15,100 Cost of goods sold Beginning Inventory $4,600 Add: Purchases $55,400 Less: Ending Inventory $15,100 Cost of goods sold $44,900

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