Chapter 6 - Chapter 6 Reporting and Analyzing Inventory In...

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Chapter 6 Reporting and Analyzing Inventory
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In Chapter 6 You will learn: How to calculate Cost of Goods Sold and Ending Inventory using the four Inventory Cost Flow Assumptions: o Specific Identification o Weighted Average Cost o FIFO o LIFO
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Specific Identification Method Each Unit Sold must be identified as coming from a specific purchase of inventory, at a specific cost. I know the VIN (Vehicle Identification number) of each car
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Specific Identification Method If the Blue Car is sold, Cost of Goods Sold is $22,000. I paid $22,000 for the Blue Car.
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Specific Identification Method Is appropriate for firms with a small number of items that are generally large, luxury items such as custom jewelry, yachts or luxury cars.
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Specific Identification Method Would not be appropriate for firms with many identical items with relatively low costs such as sneakers, soup or candy bars.
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Put all of the Units in the denominator. 2 @ $50 = $100 1 @ $60 = $ 60 1 @ $68 = $ 68 $228 Weighted Average Cost Method $228 4 = $57 average cost per unit
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This note was uploaded on 11/24/2009 for the course BA 2301 taught by Professor Mattpolze during the Fall '08 term at University of Texas at Dallas, Richardson.

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Chapter 6 - Chapter 6 Reporting and Analyzing Inventory In...

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