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Homework answers / question archive / Question 3 Not yet answered Marked out of 3

Question 3 Not yet answered Marked out of 3

Accounting

  1. Question 3 Not yet answered Marked out of 3.00 Flag question If ending work in process equivalent units are 20,000, and equivalent units completed in current period are 6,000 units, and the beginning work in process equivalent units 11,600 units, what is the work started in current period equivalent units? Select one: 16,000 units 14,400 units. 26,000 units. 37,600 units. Meyt nage

  2. The CBA Store shows the following information related to an item of its inventory: Inventory, January 1 Purchase. January 12 Purchase. January 26 500 units @ $3.00 800 units @ $3.20 200 units @ $3.50 Inventory January 31 545 units The CBA Store uses a periodic inventory system (a) What value should be assigned to the ending inventory using FIFO? (b) What value should be assigned to cost of goods sold using Average Cost? The Average Cost Per Unit The Ending Inventory The Cost of Goods Sold

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  1. Computation of work started in current period equivalent units

    Units completed in current period + units in ending WIP - units in beginning WIP = 20,000+6,000-11,600 = 14,400 units

    Answer option (B)

  2. Solution:

    Answer a) Calculation of Ending Inventory using FIFO

    In FIFO method the ending inventory is valued from the last purchases made as the one which are first purchased are sold first: Therefore,

    Ending Inventory 545 Value Units using FIFO = (200 Units * $3.5) + (345 Units * $3.2)

    = $700 + $1104

    =$1,804

    Answer b)

    1.Average Cost per Unit = {(500 Units * $3) + ( 800 Units * $3.2) + (200 Unit * $3.5)} / 1500 Units

    =$4,760 / 1500 Units

    = $3.173

     

    2. Ending Inventory value = 545 Units * $3.173

    = $1,730

     

    3.The Cost of Good Sold = No of Units Sold * Avarage Rate

    = ( 500 units + 800 Units + 200 Units - 545 Unit ) * $3.173

    = 955 Units * $3.173

    = $3030

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