Problem 8-8 (Part Level Submission) Chris’s Televisions produces television sets
ID: 2566766 • Letter: P
Question
Problem 8-8 (Part Level Submission)
Chris’s Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2017, Chris 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
During 2017, the company had the following purchases and sales.
Category
Quantity
Purchased
Cost per Unit
Quantity
Sold
Selling Price
per Unit
a) price Index?
b) Compute ending inventory, cost of goods sold, and gross profit.
c) Assume the company uses three inventory pools instead of one. Compute ending inventory, cost of goods sold, and gross profit.
Category
Quantity
Cost per Unit
Total Cost
Portable 5,900 $134 $ 790,600 Midsize 8,200 335 2,747,000 Flat-screen 2,900 536 1,554,400 17,000 $5,092,000Explanation / Answer
Single pool ending inventory
Opening inventory + Purchases - cost of goods sold
Portable
5900+15300-14000
7200
Midsize
8200+20800-23000
6000
Flat screen
2900+9800-5900
6800
Quantity
Base price
Base cost
Current price
Current Cost
Portable
7200
134
964800
147
1058400
Midsize
6000
335
2010000
402
2412000
Flat screen
6800
536
3644800
670
4556000
20000
6619600
8026400
Price index
Current Cost/Base cost
8026400/6619600
1.21252039
Single pool ending inventory
Opening inventory + Purchases - cost of goods sold
Portable
5900+15300-14000
7200
Midsize
8200+20800-23000
6000
Flat screen
2900+9800-5900
6800