Answered step by step
Verified Expert Solution
Question
1 Approved Answer
This question has stumped me. I dont understand how the number change under cost of goods sold. So if you could answer this and show
This question has stumped me. I dont understand how the number change under cost of goods sold. So if you could answer this and show how you get the answer I would appreciate it.
Required informetion CC7-1 (Algo) Accounting for Changing Inventory Costs [LO 7.3, LO 7-5] In October, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual inventory system. On December 31 of last year, NGS had 10 units at a total cost of $7.30 per unit. Nicole purchased 30 more units at $8.90 in February. In March, Nicole purchased 20 units at $10.90 per unit. In May, 50 units were purchased at $10.70 per unit. In June, NGS sold 50 units at a selling price of $12.90 per unit and 40 units at $10.90 per unit. \begin{tabular}{|c|c|c|c|c|c|} \hline FIFO (Perpetual) & Units & \multicolumn{2}{|c|}{CostperUnit} & \multicolumn{2}{|c|}{ Total } \\ \hline Beginning Inventory & 10 & $ & 7.30 & $ & 73 \\ \hline \multicolumn{6}{|l|}{ Purchases } \\ \hline February & 30 & $ & 8.90 & & \\ \hline March & 20 & $ & 10.90 & & \\ \hline May & 50 & $ & 10.70 & & \\ \hline Net Purchases & 100 & & & & 1,020 \\ \hline Goods Available for Sale & 110 & & & & 1,093 \\ \hline \multicolumn{6}{|l|}{ Cost of Goods Sold } \\ \hline Units from Beginning Inventory & 10 & s & 7.30 & & \\ \hline Units from February Purchase & 30 & $ & 8.90 & & \\ \hline Units from March Purchase & 20 & $ & 10.90 & & \\ \hline Units from May Purchase & & $ & 10.70 & & \\ \hline Total Cost of Goods Sold & 60 & & & & 558 \\ \hline Ending Inventory & & & & & \\ \hline \end{tabular} Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started