Answer just part (b) please (b)Compute the cost of goods sold using FIFO, LIFO,
ID: 340492 • Letter: A
Question
Answer just part (b) please
(b)Compute the cost of goods sold using FIFO, LIFO, and average-cost. (Round answers to 0 decimal places, e.g. 125.)
ASSIGNMENT Culver Corporation uses a perpetual inventory system. Data for product E2-D2 ind ude the purchases shown below Pre-Class Chpt 6-2A E Brief Exercise 6-8 Number of Units Unit Price Date May 7 July 28 On June 1, Culver Corporation sold 21 units, and on August 27, 34 more un ts. $11 16 Brief Exercise 6-7 34 (a) Review Results by Study Objective Your answer is partially correct. Try again. Calculate the average cost of the goods sold in the sale. (Round answers to 3 decimal places, e.g. 5.125.) June i sale Aug. 27 sale: (231.000 14.091 Attempts: 3 of 3 used (b) Compute the cost of gaods sold using FLFO, LIFO, and average-cost. (Round answers to 0 decimal places, e-g. 12s.) FIFO LIFO AVERAGE-COST Cost of goods sold s SHOW LIST OF ACCOUNTS LINK TO TEXTExplanation / Answer
(a)
Average cost of goods sold in the sale will be calculated as follows:
June 1 sale = $11.000
August 27 sale = [(21 x $11) + (34 x $16)]/(21 + 34) = $14.091
(b)
Under FIFO cost flow assumption, it is assumed that units brought into inventory earliest will be sold first. Therefore, June 1 sale will include units from May 7 purchases and August 27 sale will include 21 units from May 7 purchases and 13 units from July 28 purchases.
Cost of goods sold under FIFO = (21 x $11) + (21 x $11) + (13 x $16) = $670
Under LIFO cost flow assumption, it is assumed that the units brought into inventory most recently will be sold first. Therefore, June 1 sale will include units from May 7 and August 27 sale will include units from July 28 purchases.
Cost of goods sold under LIFO = (21 x $11) + (34 x $16) = $775
Under average-cost cost flow assumption, the average cost of units available on the date of sale is used to determined the cost of goods sold. Average cost of units available on June 1 is $11 and average cost of units available on August 27 is $140.91.
Cost of goods sold under average-cost = (21 x $11) + (34 x 14.091) = $710