Math  /  Data & Statistics

QuestionUrban Glam Cosmetics made sales on the following dates at a selling price of $36\$ 36 per unit: Book Pint ferences \begin{tabular}{|c|c|} \hline Jan. 10 & 74 units \\ \hline Mar. 15 & 220 units \\ \hline Oct. 5 & 490 units \\ \hline Totals & 784 units \\ \hline \end{tabular}
Required: The business uses a perpetual inventory system.
1. Determine the costs that should be assigned to the ending inventory and to goods sold under the following methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Ic Prev 1 of 6 Next

Studdy Solution

STEP 1

1. The business uses a perpetual inventory system.
2. The methods to be used for cost assignment are not specified, but common methods include FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and Average Cost.
3. The sales and purchases are recorded in chronological order.

STEP 2

1. Calculate costs using the FIFO method.
2. Calculate costs using the LIFO method.
3. Calculate costs using the Average Cost method.

STEP 3

Calculate costs using the FIFO method.
- **Beginning Inventory (Jan. 1):** 83 units at 13.00each.Purchased(Mar.14):290unitsat13.00 each. - **Purchased (Mar. 14):** 290 units at 14.00 each. - **Purchased (July 30):** 540 units at $15.00 each.
**Sales:** - **Jan. 10:** 74 units - **Mar. 15:** 220 units - **Oct. 5:** 490 units
Calculate the cost of goods sold (COGS) and ending inventory:
1. **Jan. 10 Sale (74 units):** - From beginning inventory: 74×13.00=96274 \times 13.00 = 962
2. **Mar. 15 Sale (220 units):** - Remaining from beginning inventory: 9×13.00=1179 \times 13.00 = 117 - From Mar. 14 purchase: 211×14.00=2954211 \times 14.00 = 2954
3. **Oct. 5 Sale (490 units):** - Remaining from Mar. 14 purchase: 79×14.00=110679 \times 14.00 = 1106 - From July 30 purchase: 411×15.00=6165411 \times 15.00 = 6165
Calculate ending inventory: - Remaining from July 30 purchase: 129×15.00=1935129 \times 15.00 = 1935

STEP 4

Calculate costs using the LIFO method.
1. **Oct. 5 Sale (490 units):** - From July 30 purchase: 490×15.00=7350490 \times 15.00 = 7350
2. **Mar. 15 Sale (220 units):** - Remaining from July 30 purchase: 50×15.00=75050 \times 15.00 = 750 - From Mar. 14 purchase: 170×14.00=2380170 \times 14.00 = 2380
3. **Jan. 10 Sale (74 units):** - Remaining from Mar. 14 purchase: 120×14.00=1680120 \times 14.00 = 1680 - From beginning inventory: 74×13.00=96274 \times 13.00 = 962
Calculate ending inventory: - Remaining from beginning inventory: 9×13.00=1179 \times 13.00 = 117

STEP 5

Calculate costs using the Average Cost method.
1. Calculate the average cost per unit: $ \text{Average Cost} = \frac{13239}{913} \approx 14.50 \]
2. **COGS for 784 units:** $ 784 \times 14.50 = 11368 \]
3. **Ending Inventory for 129 units:** $ 129 \times 14.50 = 1870.50 \]
The costs assigned to ending inventory and goods sold are:
- **FIFO:** - COGS: 962+117+2954+1106+6165=11304962 + 117 + 2954 + 1106 + 6165 = 11304 - Ending Inventory: 19351935
- **LIFO:** - COGS: 7350+750+2380+962=114427350 + 750 + 2380 + 962 = 11442 - Ending Inventory: 117117
- **Average Cost:** - COGS: 1136811368 - Ending Inventory: 1870.501870.50

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