Problem 8-8 (Part Level Submission) Category Quantity Cost per Unit Total Cost C

Question

Problem 8-8 (Part Level Submission)

Category

Quantity

Cost per Unit

Total Cost

Category

Quantity
Purchased

Cost per Unit

Quantity
Sold

Selling Price
per Unit

Problem 8-8 (Part Level Submission)

Adams’s Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2017, Adams adopted dollar-value LIFO and decided to use a single inventory pool. The company’s January 1 inventory consists of:

Category

Quantity

Cost per Unit

Total Cost

Portable 6,300 $125 $ 787,500 Midsize 7,700 313 2,410,100 Flat-screen 2,900 500 1,450,000 16,900 $4,647,600
During 2017, the company had the following purchases and sales.

Category

Quantity
Purchased

Cost per Unit

Quantity
Sold

Selling Price
per Unit

Portable 14,400 $138 13,800 $188 Midsize 20,100 375 23,300 506 Flat-screen 10,100 625 6,300 750 44,600 43,400 Calculate price index. (Round price index to 4 decimal places, e.g. 1.4562.) Price index

Explanation / Answer

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15837200

Gross Profit=Sale-COGS

A B A*B C A*C Ending Inventory Base Price Base Cost Current Price Current Cost Portable 6900 125 862500 138 952200 Mid Sized 4500 313 1408500 375 1687500 Flat Screen 6700 500 3350000 625 4187500 Total 18100 938 5621000 1138 6827200 Price Index= Current Cost/Base Cost Price Index= 6827200/5621000 Price Index= 1.2146 Working: Beginning Purchase Sale Closing Inventory A B C A+B-C Portable 6300 14400 13800 6900 Mid Sized 7700 20100 23300 4500 Flat Screen 2900 10100 6300 6700

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