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    Compute the cost of ending inventory using FIFO, LIFO, weigh

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    The inventory record for Item S9 reveals the following for Year 4. The firm uses a periodic inventory system.

    Units Per Unit Cost Total
    Inventory, January 1, Year 4 1,800 1.60 2,880
    Purchases:
    February 18 600 1.68 1,008
    May 2 900 1.72 1,548
    July 26 1,500 1.80 2,700
    September 29 1,200 1.84 2,208
    December 3 1,800 1.88 3,384
    Total purchases 6,000 $10,848
    Total available for sale 7,800 $13,728
    Less inventory, December 31, Year 4 (2,400) ?
    Units sold during Year 4 5,400 ?

    Required:

    a. Compute the cost of ending inventory assuming that a FIFO cost-flow assumption is used.
    b. Compute the cost of ending inventory assuming that a LIFO cost-flow assumption is used.
    c. Compute the cost of ending inventory assuming that a weighted-average cost-flow assumption is used.

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    Solution Preview

    The inventory record for Item S9 reveals the following for Year 4. The firm uses a periodic inventory system.

    Units Per Unit Cost Total

    Inventory, January 1, Year 4 1,800 1.60 2,880

    Purchases:
    February 18 600 1.68 1,008
    May 2 900 1.72 1,548
    July 26 1,500 1.80 2,700
    September 29 1,200 1.84 2,208
    December 3 1,800 1.88 3,384 ...

    Solution Summary

    This solution is comprised of a detailed explanation to compute the cost of ending inventory assuming that a FIFO cost-flow assumption is used.

    $2.19

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