Current Inventory Cost Basis adjusted for inflation using the CPI
Not what you're looking for?
A total of 80,000 units were sold during the first quarter. The current cost per unit was $2.10 on December 31, 2000 and $2.40 on March 31, 2001
Use the current cost basis, compute the first quarter of 2001
1. Ending Inventory
2. Cost of Goods Sold
Calculations
Items Units Price per unit Cost Price index
Beginning Inventory 20,000 $2.10 $42,000.00
Jan 25,000 $2.20 $55,000.00 1.020142 $56,107.81
Feb 30,000 $2.25 $67,500.00 1.014134 $68,454.05
Mar 20,000 $2.35 $47,000.00 1.005841 $47,274.53
Total Units 95,000 $171,836.38
minus Units Sold 80,000
Ending Inventory 15,000 $2.40 $36,000.00
1. Ending Inventory is 15, 000 Units @ current cost of $2.40 a unit = $36,000
2. COGS is Beginning Inventory + Purchases - Ending Inventory so 42,000 + 171,836.38 -36,000= $177,836.38
Purchase this Solution
Solution Summary
Currently inventory cost basis adjusted for inflation using the CPI are examined.
Solution Preview
Company uses historical cost basis. Its uses the periodic system and the FIFO inventory method. On January 1, 2001 the inventory consisted
of 20,000 units at $2 a unit. During the first quarter of 2001, the following purchases were made:
Date Units Actual Cost
Jan 17 25,000 55,000
Feb 13 30,000 67,500
Mar 20 20,000 47,000
A total of 80,000 units were sold during the first quarter. The current cost per unit ...
Purchase this Solution
Free BrainMass Quizzes
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Introduction to Finance
This quiz test introductory finance topics.