Problem 6-02A a, b1-b2, c (Video)

Martinez Distribution markets CDs of the performing artist Fishe. At the beginning of October, Martinez had in beginning inventory 3,100 of Fishes CDs with a unit cost of $7. During October, Martinez made the following purchases of Fishes CDs.

Oct. 3		3,875	@	$8		Oct. 19		4,650	@	$10
Oct. 9		5,425	@	$9		Oct. 25		6,200	@	$11

During October, 16,895 units were sold. Martinez uses a periodic inventory system.

Determine the cost of goods available for sale.

Cost of goods available for sale

$

Calculate weighted average cost per unit. (Round answer to 2 decimal places, e.g. 2.25.)

Weighted average cost per unit

$

Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (Round answers to 0 decimal places, e.g. 1,250. Use weighted-average unit cost rounded to 2 decimal places for computations.)

		FIFO		LIFO		AVERAGE-COST
The ending inventory		$		$		$
The cost of goods sold		$		$		$

Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement?

(1)		FIFOLIFOAverage-cost results in the highest inventory amount, $ .
(2)		FIFOLIFOAverage-cost results in the highest cost of goods sold, $ .