Question
Concord Company sells two types of pumps. One is large and is for commercial use. The other is smaller and is used in residential swimming
Concord Company sells two types of pumps. One is large and is for commercial use. The other is smaller and is used in residential swimming pools. The following inventory data is available for the month of March.
Units Price per Unit Total
Residential Pumps Inventory at Feb. 28: 220 $ 380 $ 83,600
Purchases: March 10 490 $460 $225,400
March 20 400 $ 490 $ 196,000
March 30 300 $ 520 $ 156,000
Sales: March 15 500 $ 550 $ 275,000
March 25 400 $ 580 $ 232,000 I
nventory at March 31: 510
Commercial Pumps Inventory at Feb. 28: 590 $ 780 $ 460,200
Purchases: March 3 590 $ 920 $ 542,800
March 12 290 $ 930 $ 269,700
March 21 500 $ 1,010 $ 505,000
Sales: March 18 880 $ 1,080 $ 950,400
March 29 590 $ 1,120 $ 660,800
Inventory at March 31: 500
Assume Concord uses dollar-value LIFO and one pool, consisting of the combination of residential and commercial pumps. Determine the cost of inventory on hand at March 31 and the cost of goods sold for March. Assume Concords initial adoption of LIFO is on March 1. Use the double-extension method to determine the appropriate price indices. (Hint: The price index for February 28/March 1 should be 1.00.) (Round Price Index to 3 decimal places e.g. 1.522 and other answers to 0 decimal places, e.g. 5,275.)
I know the ansers are: Ending inventory at current cost = $ 763,900
Ending inventory at base-year cost = ( 500 $ 780) + ( 510 $ 380) = $ 583,800
Price index = $ 763,900 / $ 583,800 = 1.308
but how do i get there???
This is the second 1/2: again, i have the answers just dont know how to get there
Current Inventory at base cost Conversion price index Inventory at LIFO cost
Ending inventory
Base inventory ($ 83,600 + $ 460,200) $ 543,800 1.000 $ 543,800
Layer ($ 583,800 $ 543,800) 40,000 1.308 52,320
Total $ 583,800 $ 596,120
Cost of goods sold = $ 543,800 + ($ 577,400 + $ 1,317,500) $ 596,120 = $ 1,842,580
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