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Determine the costs of the units using: first-in, first-out, last-in, first-out, and average cost

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The beginning inventory and purchases of an item for the period were as follows:

Beginning inventory - 6 units at $73 each
First purchase - 10 units at $72 each
Second purchase - 18 units at $74 each
Third purchase - 10 units at $75 each

The company uses the periodic system, and there were 15 units in the inventory at the end of the period. Determine the cost of the 15 units in the inventory by each of the following methods, presenting details of your computations:

(a) first-in, first-out;
(b) last-in, first-out;
(c) average cost.

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Solution Summary

You will find the answer to this question inside, including the cost of the 15 units in the inventory using FIFO, LIFO, and average costing methods.

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a) First in first out. The units which enter the inventory first exit first.

Since ending inventory is 15, under FIFO, the units in inventory will be those which entered last. So we have 10 units @$75 and 5 units @ $74

Total ...

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