Problem 6-2AA Periodic: Alternative cost flows LO P3 [The following information
ID: 2594263 • Letter: P
Question
Problem 6-2AA Periodic: Alternative cost flows LO P3
[The following information applies to the questions displayed below.]
Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March.
Problem 6-2AA Part 3
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round your average cost per unit to 2 decimal places.)
Problem 6-2AA Part 4
4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places and final answers to nearest whole dollar.)
Activities Units Sold at Retail Units Acquired at Cost 160 units e $50 per unit 460 units e $55 per unit Date Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales 480 units $85 per unit 240 units e $60 per unit 320 units e $62 per unit 280 units $95 per unit 760 units Totals 1,180 units For specific identification, the March 9 sale consisted of 60 units from beginning inventory and 420 units from the March 5 purchase; the March 29 sale consisted of 100 units from the March 18 purchase and 180 units from the March 25 purchase.Explanation / Answer
3.a) Calculation of ending inventory using FIFO
Units of Cost of goods available for sold : 160+460+240+320=1180units
Units of Cost of goods sold : 160+460+140=760 units
Units of Ending inventory : 1180-760= 420 units
b) Calculation of ending inventory using LIFO
c) Calculation of ending inventory using weighted average
Cost of goods available for sold : 160*50+460*55+240*60+320*62=67540
Units of Cost of goods available for sold : 1180 units
Weighted average cost per unit : 67540/1180 = 57.24
Ending inventory : 1180-760= 420 units
Ending inventory cost : 420*57.24 = 24039.66
d) Calculation of ending inventory using specific identification
Particulars Units Unit cost Total Purchased on 18th Mar 100 60 6000 Purchased on 25th Mar 320 62 19840 Total 420 25840