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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.

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