Problem 6-2A (Part Level Submission) Dunbar Distribution markets CDs of numerous
ID: 2423359 • Letter: P
Question
Problem 6-2A (Part Level Submission) Dunbar Distribution markets CDs of numerous performing artists. At the beginning of March, Dunbar had in beginning inventory 3,455 CDs with a unit cost of $10. During March, Dunbar made the following purchases of CDs.
March 5 2,764 @ $11
March 21 6,910 @ $14
March 13 4,837 @ $12
March 26 2,764 @ $15
During March 16,584 units were sold. Dunbar uses a periodic inventory system.
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). (Round answerS to 0 decimal places, e.g. 125.)
FIFO
LIFO
AVERAGE-COST
FIFO
LIFO
AVERAGE-COST
The ending inventory $ $ $ The cost of goods sold $ $ $Explanation / Answer
Units available for Sale: 3455+ 2764+ 6910+4837+ 2764= 20730
Total Inventory Cost: (3455*10)+ (2764*11)+(6910*14)+ (4837*12)+ (2764*15)= 261198
FIFO:
Items Sold: 16584
Ending Inventory: 20730- 16584=4146
As it is First in first out so Ending Inventory Value: (1382*12)+ (2764*15)=16584+41460=58044
COGS: 261198- 58044= 203154
LIFO:
Ending Inventory: 691*11 +3455*10= 42151
COGS: 261198- 42151= 219047
Average Cost:
((3455*10)+ (2764*11)+(6910*14)+ (4837*12)+ (2764*15))/20730
=(34550+ 30404+ 96740+ 58044+ 41460)/20730
= 12.6
Ending Inventory: 4146*12.6= 52239.6
COGS: 261198- 52239.6= 208958.4