Problem 8-6 Riverbed Company is a multi product firm. Presented below is informa
ID: 2549381 • Letter: P
Question
Problem 8-6 Riverbed Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye. Date Transaction Quantity Price/Cost 1/1 Beginning inventory 1,300 2/4 Purchase 2/20 Sale 4/2 Purchase 11/4 Sale $14 21 34 2,300 2,800 3,300 2,500 38 Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.) Average-cost per unit LINK TO TEXT Compute cost of goods sold, assuming Riverbed uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.) Cost of goods sold (a) Periodic system, FIFO cost flow (b) Perpetual system, FIFO cost flow (c) Periodic system, LIFO cost flov (d) Perpetual system, LIFO cost flow (e) Periodic system, weighted-average cost flow (f) Perpetual system, moving-average cost flow Click if you would like to Show Work for this question: Qpen Show WorkExplanation / Answer
Solution
Part 1 - Average cost =
[(1300*$14) + (2300*$21) + (3300*$26)]/(1300+2300+3300)
= ($152300/6900) = $22.0725
Part 2 - Cost of goods sold
Units Sold = (2800 + 2500) = 5300 units
Periodic System, FIFO cost flow
(1300*$14) + (1500*$21) + (800*$21) + (1700*$26)
Periodic System, LIFO cost flow
(2500*$26) + (2800*$21)
Perpetual system, LIFO cost flow
(2300*$21) + (500*$14) + (2500*$26)
Perpetual system, moving average cost flow (Note 1)
(2800*$18.4722) + (2500*$24.5307)
Note 1-
1) Average for sale on 2/20 =
[(1300*$14) + (2300*$21)]/(1300+2300)
= $66500/3600 = $18.4722
2) Average for sale on 11/4 =
[{(1300+2300-2800)*$18.47} + {3300*$26)]/(1300+2300-2800+3300)
= ($14776+$85800)/4100 = $24.5307
Particulars Cost of goods sold a.Periodic System, FIFO cost flow
(1300*$14) + (1500*$21) + (800*$21) + (1700*$26)
$110700 b. Perpetual System, FIFO cost flow (same as a.) $110700 c.Periodic System, LIFO cost flow
(2500*$26) + (2800*$21)
$123800 d.Perpetual system, LIFO cost flow
(2300*$21) + (500*$14) + (2500*$26)
$120300 e. Periodic system, Weighted average cost flow (5300*$22.0725) $116984.25 f.Perpetual system, moving average cost flow (Note 1)
(2800*$18.4722) + (2500*$24.5307)
$113048.91