Indigo Corp. had 2,060 units of part M.O. on hand May 1, 2017, costing $33 each.
ID: 2411660 • Letter: I
Question
Indigo Corp. had 2,060 units of part M.O. on hand May 1, 2017, costing $33 each. Purchases of part M.O. during May were as follows.
Units
Units Cost
A physical count on May 31, 2017, shows 2,560 units of part M.O. on hand. Using the FIFO method, what is the cost of part M.O. inventory at May 31, 2017? Using the LIFO method, what is the inventory cost? Using the average-cost method, what is the inventory cost? (Round average cost per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 1,620.)
FIFO
LIFO
Average Cost
LINK TO TEXT
LINK TO TEXT
Units
Units Cost
May 9 2,560 $34 17 4,060 36 26 1,560 37Explanation / Answer
Cost of Goods available for sale = 2,060 * $33 + 2,560 * $34 + 4,060 * $36 + 1,560 * $37
Cost of Goods available for sale = $358,900
Number of Goods available for sale = 2,060 + 2,560 + 4,060 + 1,560
Number of Goods available for sale = 10,240
FIFO:
Number of units in ending inventory = 2,560
Cost of Ending Inventory = 1,560 * $37 + 1,000 * $36
Cost of Ending Inventory = $93,720
LIFO:
Number of units in ending inventory = 2,560
Cost of Ending Inventory = 2,060 * $33 + 500 * $34
Cost of Ending Inventory = $84,980
Weighted Average Cost:
Cost per unit = Cost of Goods available for sale / Number of Goods available for sale
Cost per unit = $358,900 / 10,240
Cost per unit = $35.05
Cost of Ending Inventory = 2,560 * $35.05
Cost of Ending Inventory = $89,728