study_note_Inven_Costing Methods(2)

study_note_Inven_Costing Methods(2) - ones bought on June...

This preview shows page 1. Sign up to view the full content.

Inventory Costing Methods (Under the perpetual inventory system) A) Specific Identification Method B) Average Cost Method C) First-In, First-Out (FIFO) Method D) Last-In, Last-Out (LIFO) Method Sample Problem 2. Using “ the perpetual inventory system” , the following is the goods flow of Cappo Company for the month June: Date Explanation Quantity Unit Cost Total Cost June 1 Inventory 50 units \$ 1.00 \$ 50 6 Purchase 50 units 1.10 55 10 Sale 70 units 13 Purchase 150 units 1.20 180 20 Purchase 100 units 1.30 130 25 Purchase 150 units 1.40 210 30 Sale 210 units Goods Available for Sale 500 units 625 Total number of product sold 280 units On hand june 30 220 units A) SPECIFIC IDENTIFICATION METHOD: Assume that, 40 units of the total number of products sold on June 10 are from the ones bought on June 6, while 30 units are from the ones of June 1 Inventory. For the sale on June 30, assume that 100 units of the number of products sold on that date are from the
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ones bought on June 25, while 110 units are from the ones bought on June 13. How much would be the cost of the ending inventory under specific identification method? (Answer: \$ 279) B) AVERAGE COST METHOD: Assume that the units included in each party of sales cannot be identified as coming from the specific purchases. How much would be the cost assigned to the inventory under the average cost method? (Answer: \$ 282,70) C) FIRST-IN, FIRST-OUT METHOD: Assume that the cost of the first items acquired should be assigned to the first items sold. How much would be the cost assigned to the inventory under first-in, first-out method? (Answer: \$ 301) D) LAST-IN, FIRST-OUT METHOD: Assume that the cost of the last items purchased should be assigned to the first items sold. How much would be the cost assigned to the inventory under last-in, last-out method? (Answer: \$ 262)...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online