Klugman Appliance uses a perpetual inventory system. For its flat screen television sets, the January 1 inventory was 3 sets at $600 each. On January 10, Klugman purchased 6 units at $660 each.The company sold 2 units on January 8 and 4 units on January 15.
Instructions
Compute the ending inventory under (1) FIFO, (2) LIFO, and (3) moving average cost.
*E6 16 Yount Company reports the following for the month of June.
|
Date |
Explanation |
Units |
Unit Cost |
Total Cost |
|
June 1 |
Inventory |
200 |
$5 |
$1,000 |
|
12 |
Purchase |
300 |
6 |
1,800 |
|
23 |
Purchase |
500 |
7 |
3,500 |
|
30 |
Inventory |
120 |
Instructions
(a) Calculate the cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 400 units occurred on June 15 for a selling price of $8 and a sale of 480 units on June 27 for $9.
(b) How do the results differ from E6 6 and E6 8?
(c) Why is the average unit cost not $6 [($5 _ $6 _ $7) _ 3 = $6]?