Compute the cost assigned to ending inventory using ( a ) FIFO, ( b ) LIFO, ( c ) weighted average, and ( d )
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 680 units from beginning inventory, 240 from the February 10 purchase, 100 from the March 13 purchase, 80 from the August 21 purchase, and 260 from the September 5 purchase.
Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions Data Activities Unita Acquired at Coat Unita Sold at Retail Jan. 1 Beginning inventory EBO unita $40 per unit Feb. 10 Purchase 320 unita $25 per unit Mar. 13 Purchase 100 unital 523 per unit Mar. 15 Salaa 720 unita 575 per unit Aug. 21 Purchase 130 unita $45 per unit Sept. 5 Purchase 450 unita 541 per unit Sept. 10 Sales E20 unite 675 per unit Totala 1, 720 unita 1,340 unita Required: 1. Compute cost of goods available for sale and the number of units available for sale. Answer is complete and correct. Cost of goods available for sale Number of units available for sale 5 66,640 1.720 units 2 Compute the number of units in ending inventory. Answer is complete and correct. Ending inventory 380 units 3. Compute the cost assigned to ending inventory using (a) FIFO. (6) LIFO. (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 680 units from beginning inventory. 240 from the February 10 purchase, 100 from the Morch 13 purchase, 80 from the August 21 purchase, and 260 from the September 5 purchase. Perpetual FIFO: Goods Purchased # of Cost per units unit Date # of units sold Cost of Goods Sold Cost Cost of Goods per Sold unit Inventory Balance Cost Inventory per Balance # of units unit Jan 1 680 40.00 $ 27.200.00 Feb 10 320 3500 > $ 27.200.00 40.00 680 @ 320 @ 11 20000 35 00 $38.400.00 Mar 13 100 23.00 630 e 40.00 $ 27.200.00 320 11.200,00 100 @ 35 00 S 23.00 2 300 00 $ 40.700.00 s Mar 15 680 $ 27.200.00 280 s 35.00 $ 9.800.00 40 . 35.00 1000 1.400.00 $ 28.600.00 23.00 2,300.00 $ 12,100.00 i Aug 21 130 . 45.00 35 00 $9.800.00 230@550 100 @ 23.00 130 @ 2.300.00 4500 5.850,00 $ 17.950.00 Sept 5 490 41.00 280 5 9.800.00 35.00 100 2,300.00 23.00 130 e 45.00 5.850.00 490 S 41.00 20.090.00 $ 33.040.00 Sept 10 280e S 9.800.00 100 2,300.00 - 8 15 35.00 $ 23.00 $ 45.00 15 41.00 130 @ 5.850.00 110 620 @ 25.420.00 41.00 4.510.00 $ 22.460.00 $ 51,050.00 $ 25,420.00 $ 25,420.00 Totals Perpetual LIFO: Goods Purchased # of Cost units per unit Date Cost of Goods Sold Cost Cost of Goods per Sold unit # of units sold Jan 1 Inventory Balance Cost # of units per Inventory Balance unit 680 40.00 $ 27.200.00 s 680 @ 40.00 $ 27.200.00 s 320 11.200.00 S 38.400.00 Feb 10 320 @ 35.00 > @ 35.00 Mar 13 100 IS 23.00 680 @ 40.00 27200.00 320 11.200.00 $ 35.00 s 100 23.00 2,300.00 s 40.700.00 Mar 15 100 s 2.300.00 380 e! 40.00 $ 15,200.00 320e $ 23.00 S 35.00 $ 40.00 - 11 200.00 130 300l 12,000.00 $ 25,500.00 15,200.00 Aug 21 130le $ 45.00 380 s 40.00 $ 15,200.00 130 > 5.850.00 45.00 21.050.00 Sept5 490@ 41.00 380le 40.00 S 15,200.00 130 5.850.00 45.00 $ 41.00 490 20.090.00 $ 41.140.00 s Sept 10 490@ S 20.090 00 380 > 2000 $ 15,200.00 IS 41.00 s 45.00 130 5.850.00 25.940 S 51.440.00 Totals $ 15,200.00 Specific Identification Cost of Goods Available for sale Ending Inventory Cost # of Cost per unit Cost of Goods Sold #of Cost Cost units of sold unit Goods Sold x 0 per units Cost of Goods Available for Sale 27.000 # of units in ending Inventory per Ending Inventory unit 680 $ 40.00 $ 40,00 s 0 S 35.00 8.400 Beginning inventory Purchases: Feb 10 March 13 Aug 21 Sep 5 Total 240 - 0 $ 35.00 $ 23.00 $ 45.00 S 41.00 130 490 16.300 5.400 5.000 23.000 S 77200 0 0 80 $ 35.00 - $ 23.00 - 5 45.00 - $ 41.00 80 2.800 0 0 0 2 800 - 1.720 240 $ 8.400 s 4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.) Answer is complete but not entirely correct. FIFO LIFO Weighted Specific Average Identification 100 500 100.500 5 100 500 51.050 51.440 51.440 49 440 5 49.050 $ 49050 S 0 s Sales Less: Cost of goods sold Gross profit S 5. The company's manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager? LIFO LIFO FIFO Specific Identification
