Question
Cost information of the Alpha Pvt Ltd. show the following purchases and issues of materials during October: October 1. Beginning Balance: 2800 units @ Rs.
Cost information of the Alpha Pvt Ltd. show the following purchases and issues of materials during October:
October 1. Beginning Balance: 2800 units @ Rs. 12.00 per unit.
4. Issued 1200 units.
6. Received 1000 units @ Rs.13.30 per unit.
8. Issued 1000 units.
14. Received 400 units @ Rs.14.00 per unit.
17. Issued 800 units.
20. Received 500 units @ Rs.14.16 per unit.
25. Issued 900 units.
27. Received 1200 units @ Rs.13.00 per unit.
Required: 1. The cost of material consumed and the cost assigned to the inventory at the end of the month, using FIFO Method. Which industry uses FIFO method and Why?
2. The cost of material consumed and the cost assigned to the inventory at the end of the month, using Average Cost Method. Which industry uses average cost method and Why?
3. The cost of material consumed and the cost assigned to the inventory at the end of the month, using LIFO Method
4. The comparative statement showing the effect of each method on gross profit?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
1 FIFO FirstIn FirstOut Method Industries that deal with perishable goods or items that have a short shelf life such as food and beverage pharmaceuticals and agriculture often use the FIFO method This ...
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Step: 3
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
