Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 27 units at $400 Feb. 19 Purchase 54 units at $460 June 8 Purchase 63 units at $520 Oct. 7 Purchase 56 units at $550 There are 45 units of the item in the physical inventory at December 31. Determine the cost of ending inventory using (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the average cost method. Inventory Cost a. First-in, first-out method $ 24,750 b. Last-in, first-out method $ 19,080 c. Average cost method $ 111,150

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Antwan Velez

Business

1 August, 12:17

Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 27 units at $400 Feb. 19 Purchase 54 units at $460 June 8 Purchase 63 units at $520 Oct. 7 Purchase 56 units at $550 There are 45 units of the item in the physical inventory at December 31. Determine the cost of ending inventory using (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the average cost method. Inventory Cost a. First-in, first-out method $ 24,750 b. Last-in, first-out method $ 19,080 c. Average cost method $ 111,150

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Remington · Answer 1

FIFO Ending Inventory $ 24750

LIFO Ending Inventory $ 19080

Average Cost Method Ending Inventory $22,320

Explanation:

Date Units Unit Price Total Cost

Jan. 1 Inventory 27 units $400 $ 10800

Feb. 19 Purchase 54 units $460 $ 24840

June 8 Purchase 63 units $520 $ 32760

Oct. 7 Purchase 56 units $550 $ 30800

Total 200 units $ 99200

There are 45 units of the item in the physical inventory at December 31

FIFO Ending Inventory

45 units at $ 550 = $ 24750

LIFO Ending Inventory $ 19080

27 units at $ 400 = $ 10800

18 units at $ 460 = $ 8280

Average Cost Method Ending Inventory $ 22,320

Units Cost = $ 99200 / 200 = $ 496

45 units at $ 496 = 22,320