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Homework answers / question archive / Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system
Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki's records show the following for the month of January. Sales totaled 310 units.
DateUnitsUnit CostTotal CostBeginning InventoryJanuary 1 240 $80 $19,200 PurchaseJanuary 15 360 90 32,400 PurchaseJanuary 24 200 110 22,000
Required:
1) Computation of Number and Cost of Goods available for Sale:
Number of Goods available for sale = 240 + 360 + 200 = 800 Units
Cost of Goods available for sale = 19,200 + 32,400 + 22,000 = $73,600
2) Computation of Number of Units in Ending Inventory:
Ending Inventory = Units Available - Units Sold
= 800 - 310
Ending Inventory = 490 units
3. Computation of Cost of Ending Inventory and Cost of Goods Sold using FIFO:
Cost of Ending Inventory = (200units *$110) + (290 units * $90) = $48,100
Cost of Goods Sold = (240 units * $80) + (70units * $90) = $25,500
Computation of Cost of Ending Inventory and Cost of Goods Sold using LIFO:
Cost of Ending Inventory = (240 units *$80) + (250 units * $90) = $41,700
Cost of Goods Sold = (200 units * $110) + (110units * $90) = $31,900
Computation of Cost of Ending Inventory and Cost of Goods Sold using Weighted Average Cost:
Cost of Ending Inventory = 490 Units * $92 = $45,080
Cost of Goods Sold = 310 units * $92 = $28,520
Weighted average cost per unit = $73,600 / 800units = $92
