MESSAGE MY INSTRUCTOR STANDARD V WileyPLUS Problem 62 Cheyen

MESSAGE MY INSTRUCTOR STANDARD V WileyPLUS Problem 6-2 Cheyenne Inc. uses a perpetual inventory system. Its records show the following for the month of May. Unit Total Date Explanation Units Cost Cost May 1 Inventory May 15 Purchase May 18 Sale May 24 Purchase 28 $11 $308 25 12 300 (42) 36 13 468 47 $1,076 Total Calculate the cost of goods sold for May and the ending inventory at May 31 using the FIFO formula. Cost of goods sold s Ending Inventory Calculate the cost of goods sold for May and the ending inventory at May 31 using the average cost formula. (For average, use 3 decinal places e·15 235 is your 2 decimal places, e.g 5.25) Cost of goods sold Ending Inventory s By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Question Attempts: 0 of 1 us

Solution

1) Costs of goods sold $        476 Ending Inventory $        600 Workings: FIFO stands for first in first out,It means inventory which is bought first is sold first. So, cost of goods sold of 42 units will be calculated as follows: Date Explanation Units Unit cost Total Cost May 1 Inventory 28 $          11 $        308 May 15 Purchase 14 $          12 $        168 Total 42 $        476 Now, Costs of goods available for sale $    1,076 Less Costs of goods sold $        476 Costs of Ending Inventory $        600 2) Costs of goods sold $ 507.78 Ending Inventory $ 568.22 Working: Average cost per unit = Total Costs of goods available for sale / Total units available for sale = $       1,076 / (47+42) = $     12.090 Costs of goods sold = Units sold x Average cost per unit = 42 x $ 12.090 = $     507.78 Ending Inventory = Ending Inventory uits x Average cost per unit = 47 x $ 12.090 = $     568.22 Total $ 1,076.00