Stillwater Inc.: Inventory Costing methods - A Perpetual System
Not what you're looking for?
The following information is available concerning Stillwater Inc.:
Units Unit Cost
Beginning inventory 200 $10
Purchases:
March 5 300 11
June 12 400 12
August 23 250 13
October 2 150 15
Stillwater, which uses a perpetual system, sold 1,000 units for $22 each during the year. Sales occurred on the following dates:
February 12 150
April 30 200
July 7 200
September 6 300
December 3 150
Required
1. Calculate ending inventory and cost of goods sold for each of the following three methods
a. Moving average
b. FIFO c. LIFO
2. For each of the three methods, compare the results with those of Carter in Exercise 5-22. Which method gives a different answer depending on whether a company uses a periodic or perpetual inventory system?
3. Assume the use of the perpetual system and an estimated tax rate of 30%. How much more or less (indicate which) will Stillwater pay in taxes by using LIFO instead of FIFO? Explain your answer
Purchase this Solution
Solution Summary
This tutorial uses several methods to calculate the ending inventory and cost of goods sold for Stillwater Inc.
Solution Preview
1. Calculate ending inventory and cost of goods sold for each of the following three methods
a. Moving average
February 12 COGS = 200*10/200*150 = 1,500
April 30 COGS = (50*10 + 300*11)/350*200 = 2,171.43
July 7 COGS = (150*10.86 + 400*12)/550*200 = 2,337.81
September 6 COGS = (350*11.69 + 250*13)/600*300) = 3,670.59
December 3 COGS = (300*12.24 + 150*15)/450*150=1,974
Total COGS = 11,654
Ending inventory = (300*12.24 + 150*15)/450*300 = 3,948
b. FIfO
February ...
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Lean your Process
This quiz will help you understand the basic concepts of Lean.