Question

RJ Corporation has provided the following information about one of its inventory items: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 400 $ 3,200 6/6 Purchase 800 $ 3,600 9/10 Purchase 1,200 $ 4,000 11/15 Purchase 800 $ 4,200 During the year, RJ sold 3,000 units. What was ending inventory using the LIFO cost flow assumption under a periodic inventory system

Answer 1

Answer:

Ending inventory  = $770000

Explanation:

given data

Date    Transaction              Number of Units         Cost per Unit

1/1       Beginning Inventory      400                          $3,200

6/6      Purchase                        800                         $3,600

9/10     Purchase                       1,200                       $4,000

11/15      Purchase                      800                         $4,200

solution

Date                  Units            Unit cost         Total  

Beg inventory  400              3200               1280000  

6 Jun                800              3600               2880000  

10 Sep              1200             4000              4800000  

15 Nov               800              4200              3360000  

Total                  3200                                   12320000  

so here Average unit cost will be

Average unit cost = $\frac{ 12320000}{3200}$

Average unit cost = $3850

and

Ending inventory  is

Ending inventory = ( 3200 - 3000 ) × 3850

Ending inventory  = $770000