Consider the following information for Maynor Company which

Consider the following information for Maynor Company, which uses a periodic inventory system: Transaction Units Unit Cost Total Cost $74 80 84 90 $1,776 2,720 4,032 4,770 January 1 March 28 Purchase August 22 Purchase October 14 Purchase Beginning Inventory 24 34 48 53 Goods Available for Sale 159 $13,298 The company sold 53 units on May 1 and 48 units on October 28 Required Calculate the company\'s ending inventory and cost of goods sold using the each of following inventory costing methods. (Round the per unit cost to two decimal places and then round your answer to the nearest whole dollar.) a. FIFO: Ending Inventory Cost of Goods Sold b. LIFO Ending Inventory Cost of Goods Sold c. Weighted Average Ending Inventory Cost of Goods Sold

Solution

note:

since this problem is based on periodic inventory method:

number of unit sold and units in ending inventory needs to be known first.

number of units sold = 53 + 48 =>101 units.

units in ending inventory = goods available for sale - number of units sold

=>159 - 101

=>58 units.

a.FIFO:

working note:

58 units of ending inventory under FIFO will be from Last made purchases

=> 53 units will be from october 14 purchase. and remaining 5 units will be from august 22 purchase.

value of ending inventory = [53 *$90] +[5*$84]

=>$5,190.

cost of goods sold = cost of goods available for sale - value of ending inventory

=>$13,298 - 5,190

=>$8,108.

b.

LIFO:

note:

58 units of ending inventory under LIFO will be from units first purchased.

i.e 24 units from beginning purchases and remaining(58-24 =>34 units ) from march 28 purchases

value of ending inventory = [24*$74] +[34*$80]=>$4,496.

value of cost of goods sold = cost of goods avaialble for sale - cost of ending inventory

=>$13,298 - $4,496

=>$8,802.

c.weighted average:

weighted average cost per unit = total cost / number of units

=>$13,298 / 159

=>$83.64...(two decimals)

ending inventory = 58 units * $83.64 =>$4,851.

cost of goods sold = 101 units *$83.64 =>$8,447.

ending inventory	$5,190
cost of goods sold	$8,108