Homework SourseInventory Costing Methods Morrison Inc reported the followin
Inventory Costing Methods
Morrison Inc. reported the following information for the month of October:
During October, Morrison sold 143 units. The company uses a periodic inventory system.
Required:
What is the value of ending inventory and cost of goods sold for October under the following assumptions.
| Inventory, October 1 | 58 units @ $26 | |
| Purchase: | ||
| October 7 | 52 units @ $27 | |
| October 18 | 72 units @ $29 | |
| October 27 | 42 units @ $31 |
Solution
1. Value of ending inventory and cost of goods sold
2. Value of ending inventory and cost of goods sold under FIFO method
cost of goods sold = 58*26+52*27+33*29 = 3869
value of ending inventory = 39*29+42*31 = 2433
3. Value of ending inventory and cost of goods sold under LIFO method
cost of goods sold = 42*31+72*29+29*27 = 4173
ending inventory = 58*26+23*31 = 2221
4. Weighted average method
Weighted Average Unit Cost = 58*26+52*27+72*29+42*31 = 6302
= 6302/224 = 28.13
cost of goods sold = 143*28.13 = 4022.59
ending inventory = 81*28.13 = 2278.53
| Date | Units | Price | Total Cost |
| 01.10 | 58 | 26 | 1508 |
| 07.10 | 52 | 27 | 1404 |
| 18.10 | 72 | 29 | 2088 |
| 27.10 | 42 | 31 | 1302 |
| Total (a) | 224 | 6302 | |
| Cost of Goods Sold | |||
| 49 | 26 | 1274 | |
| 36 | 27 | 972 | |
| 54 | 29 | 1566 | |
| 4 | 31 | 124 | |
| Total (b) | 143 | 3936 | |
| Ending inventory (a-b) | 81 | 2366 |
