Question

Sweet Acacia Corp. sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Sweet Acacia Corp.’s purchases of EZslide snowboards during September. During the same month, 104 EZslide snowboards were sold. Sweet Acacia Corp. uses a periodic inventory system.
Date Explanation Units Unit Cost Total Cost
Sept. 1 Inventory Unit Cost 14 $110 $ 1,540
Sept. 12 Purchases 45 $113 $5,085
Sept. 19 Purchases 57 $114 $ 6,498
Sept. 26 Purchases 24 $115 $ 2,760
Totals 140 $15,883

Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods.

Answer 1

Answer:

FIFO = $4,128

LIFO = $4,026

weighted average-cost = $ 4,078.08

Explanation:

FIFO

Inventory : 12 units × $114 = $1,368

                  24 units × $115 = $2,760

Total                                    = $4,128

LIFO

Inventory : 14 units × $110 = $1,540

                  22 units × $113 = $2,486

Total                                    = $4,026

Weighted Average Cost

New Cost per Unit = Total Cost / Total Units

September 12

New Cost per Unit = ((14 units × $110 ) + (45 units × $113)) / (14 units + 45units)

                               = $112.59

September 19

New Cost per Unit = ((59 units × $112.59 ) + (57 units × $114)) / (59 units + 57units)

                               = $113.28

September 19

New Cost per Unit = ((116 units × $113.28 ) + (24 units × $115)) / (116 units + 24 units)

                               = $113.57

Inventory Cost = (140-104) units × $113.28

                        = $ 4,078.08