Problem 8-6 Windsor Company is a multi product firm. Presented below is informat

Question

Problem 8-6 Windsor 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 2,900 2/4 Purchase 2/20 Sale 4/2 Purchase 11/4 Sale $18 3,900 4,400 4,900 4,100 26 48 Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.) Average-cost per unit Compute cost of goods sold, assuming Windsor uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 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 flow (d) Perpetual system, LIFO cost flow (e) Periodic system, weighted-average cost flow (f) Perpetual system, moving-average cost flow

Explanation / Answer

Average cost per unit = (2900*18+3900*26+4900*34)/(2900+3900+4900)= $   27.3675 COST OF GOODS SOLD: Units sold = 4400+4100 = 8500. a) Periodic System, FIFO = 2900*18+3900*26+1700*34 = $   211,400 b) Perpetual system, FIFO = 2900*18+1500*26+2400*26+1700*34 = $   211,400 c) Periodic system, LIFO = 4900*34+3600*26 = $   260,200 d) Perpetual system, LIFO = 3900*26+500*18+4100*34 = $   249,800 e) Periodic system, Weighted average = 8500*27.3675 = $   232,624 f) Perpetual system, moving average: Wt. Avg on 2/4 = (2900*18+3900*26)/6800 = $   22.5882 COGS of sale on 2/20 = 4400*22.5882 = $      99,388 Wt.Avg on 4/2 = (2400*22.5882+4900*34)/(2400+4900) = $   30.2482 COGS of sale on 11/4 = 4100*30.2482 = $   124,018 Total COGS under perpetual moving average = 99388+124018 = $   223,406

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