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Question

Culver Corporation markets CDs of numerous performing artists. At the beginning of March, Culver Corporation had in beginning inventory 2,530 CDs with a unit cost of $7. During March, Culver Corporation made the following purchases of CDs

March 5	2,180	@	$8	March 21	5,110	@	$10
March 13	3,550	@	$9	March 26	2,190	@	$11

During March 11,090 units were sold. Culver Corporation uses a periodic inventory system.

Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost).



Answer 1

Here's how to solve the problem.

Hope this helps!

Scott

                                     units              cost                    amount

Beginning Inventory             2,530           $7                          $17,710

5-Mar                                     2,180            8                             17,440

13-Mar                                   3,550            9                             31,950

21-Mar                                   5,110            10                           51,100

26-Mar                                   2,190            11                           24,090

Total Purchases                   15,560                                        $142,290

              FIFO                                    

              units     cost      amount

               2,530   $7          $17,710

               2,180   8             17,440

               3,550   9             31,950

* 2,830   10           28,300

               11,090               $95,400 COGS

* 11,090 - (2,530 + 2,180 + 3,550)                              

                            

$142,290  Total Purchases

 (95,400) Less COGS

 $46,890  Ending Inventory

              LIFO                                    

              units     cost      amount

* 240   $8           $1,920   

               3,550   9             31,950

               5,110   10           51,100

               2,190   11           24,090

               11,090               $109,060             COGS

* 11,090 - (3,550 + 5,110 + 2,190)                              

                                                           

$142,290  Total Purchases

 (109,060) Less COGS

    $33,230 Ending Inventory

Average Cost     

Total Purchases $142,290

Total Units          15,560

Total Purchases ÷ Total Units = Average Cost per Unit         $9.144601542

Units Sold            11,090

Average Cost per Unit X Units Sold = COGS           $101,414

Total Purchases - COGS = Ending Inventory               $40,876