Ask question

Ask question

All categories

2 years ago

3

The Company uses a periodic inventory system. For specific identification, ending inventory consists of 200 units, where 180 are

from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

1 answer:

nignag [31]2 years ago

8 0

Answer:

See explanation section

Explanation:

Requirement A - Specific Identification

Ending inventory are the inventory that are not sold during the period.

Beginning Inventory remain unsold = 15 Units × $6.00 = $90.00

January 20 inventory remain unsold = 5 units × $5.00 = $25.00

<u>January 30 inventory remain unsold = 180 units × $4.50 = $810 </u>

<em>Total Ending Inventory = 200 units = $925.00</em>

Cost of goods sold are the cost of the product sales during the period.

Beginning Inventory sold = 125 units × $6.00 = $750.00

<u>January 20 inventory sold = 55 units × $5.00 = $275.00</u>

<em>Cost of goods sold = 180 units = $1,025.00</em>

Requirement B - Weighted Average

Ending inventory

<u>See the below image:</u>

Cost of goods sold

Beginning Inventory sold = 100 units × $6.00 = $600.00

<u>January 20 inventory sold = 80 units × $5.40* = $432.00</u>

<em>Cost of goods sold = 180 units = $1,032.00</em>

* - See the image below to get the appropriate answer

Requirement C - FIFO

Ending inventory

Beginning Inventory remain unsold = 0 Units × $6.00 = $0.00

January 20 inventory remain unsold = 20 units × $5.00 = $100.00

<u>January 30 inventory remain unsold = 180 units × $4.50 = $810.00 </u>

<em>Total Ending Inventory = 200 units = $910.00</em>

Cost of goods sold

Beginning Inventory sold = 140 units × $6.00 = $840.00

<u>January 20 inventory sold = 40 units × $5.00 = $200.00</u>

<em>Cost of goods sold = 180 units = $1,040.00</em>

Requirement D - LIFO

Ending inventory

Beginning Inventory remain unsold = 140 Units × $6.00 = $840.00

<u>January 20 inventory remain unsold = 60 units × $5.00 = $300.00</u>

<em>Total Ending Inventory = 200 units = $1,140.00</em>

Cost of goods sold

<u>January 30 inventory sold = 180 units × $4.50 = $810.00</u>

<em>Cost of goods sold = 180 units = $810.00</em>

You might be interested in

A manufacturer would likely make an ___________ in a market following the long-run process of beginning and expanding production

Brilliant_brown [7]

Answer:

A manufacturer would likely make an entry in a market following the long-run process of beginning and expanding production in response to a sustained pattern of profits.

7 0

2 years ago

Read 2 more answers

Carrie enjoyed observing wildlife in natural habitats. She wanted to be able to hide at a distance but observe wildlife close up

jek_recluse [69]

Answer: 1. The core benefit

2. Expected product

Explanation:

Product Levels model indicates the degree to which certain products and services meet the expectations of customers. There are basically five product levels models which include; Core benefit, Generic product, Expected product, Augmented product, and Potential product.

The two product levels model Carrie experienced in her purchase of the Nikon 7576, and Monarch 5 are;

a. The core benefit: A product meets the core benefit when it meets the needs of the customer. The two products purchased by Carrie satisfy her basic need of binoculars that would enable her to observe wildlife from a distance.

b. Expected Product: This is factored when the product features meets the expectation of the customer. In Carrie's case, she liked the feel and features of these devices and this implies that they met her expectations.

6 0

2 years ago

Huai takes out a $3,600 student loan at 6.6% to help him with 2 years of community college. After finishing the 2 years, he tran

Alja [10]

Answer:

a. The monthly payment on loan 1 is $76.03.

b. The monthly payment on loan 2 is $411.69.

Explanation:

a. Calculate the monthly payment on loan 1.

To determine the amount of periodic payments, the present value of annuity formula should be used:

$PV=P(\frac{1-(1+r)^{-n} }{r} )$

Where:

PV= present value

p=periodic payment

i=rate of interest

n=number of periods

We get the data for this exercise:

PV= 3,600 (loan).

p= unknown (we must find this value)

i= 6.6% or 0.066. However, because we need to know the monthly payment, the interest rate should be divided by 12 (0.066 / 12).

n= 4 years and 7 months, that is 55 months.

And we replace in the formula:

$3600=P(\frac{1-(1+\frac{0.066}{12})^{-55} }{\frac{0.066}{12} } )$

$3600=P(\frac{1-(1+0.055)^{-55} }{0.0055} )$

$3600=P(\frac{1-(0.7395812268)}{0.0055} )$

$3600=P(\frac{0.2604187732}{0.0055} )$

$3600=P(47.348867)$

Therefore:

$P=\frac{3600}{47.348867}$

$P=76.03$

The monthly payment on loan 1 is $76.03.

b. Calculate the monthly payment on loan 2.

We get the data for this exercise:

PV= 11,600 (loan 2).

p= unknown (we must find this value)

i= 7.3% or 0.073. However, because we need to know the monthly payment, the interest rate should be divided by 12 (0.073 / 12).

n= 2 years and 7 months, that is 31 months.

And we replace in the formula:

$11600=P(\frac{1-(1+\frac{0.073}{12})^{-31} }{\frac{0.073}{12} } )$

$11600=P(\frac{1-(1+0.006083)^{-31} }{0.006083} )$

$11600=P(\frac{1-(0.8286047296)}{0.006083} )$

$11600=P(\frac{0.1713952704}{0.006083} )$

$11600=P(28.1761088936)$

Therefore:

$P=\frac{11600}{28.1761088936}$

$P=411.69$

The monthly payment on loan 2 is $411.69.

8 0

2 years ago

Ben and Miranda recently sold some land they owned for $150,000. They received the land and a check equal to the amount of the t

natima [27]

D is the correct answer

7 0

1 year ago

RajDee Furniture Company (RFC) buys and sells office furniture. The company buys chairs from a manufacturer for $40 per unit. Or

skad [1K]

Answer:

(1) 2,28 units

(ii) 1,414 units

(iii) Minimum stock is less than EOQ.

Explanation:

(1) Units Ordered each time

$Economic\ order\ Quantity=\sqrt{\frac{2\times A\times O}{C} }$

where,

A = Annual Requirement =40,000 Units

O = Ordering Cost = $200 Per unit

Minimum Stock for lead time:

= (40,000 Units × 10) ÷ 365

= 1096 (Approximately)

C=Annual Carrying cost per unit = $40 × 10% × 1/2

= 2

$Economic\ order\ Quantity=\sqrt{\frac{2\times 40,000\times 200}{2} }$

= 2828 Units

(2) Average Inventory = EOQ ÷ 2

= 2828 Units ÷ 2

= 1,414 Units

(3) If the Lead time Increase 10 to 15 days:

Minimum Stock Need to be Maintained:

= Avg Daily Demand × Lead time

= (40,000 Units ÷ 365) × 15

= 1,644 Units

Minimum Stock is Less the EOQ , then Increasing Lead time to 15 Days Does not Have effect on EOQ.

8 0

2 years ago

Read 2 more answers