Periodic inventory

Question

Periodic inventory using FIFO, LIFO, and weighted average cost methods

The units of an item available for sale during the year were as follows:

DateLine Item DescriptionUnitsCost per UnitAmount
Jan. 1	Inventory	20 units	at $45	$900
Aug. 13	Purchase	18 units	at $47	846
Nov. 30	Purchase	9 units	at $49	441
	Available for sale	47 units		$2,187

Answer 1

Here’s how to calculate COGS and Ending Inventory using:

1. FIFO (First-In, First-Out)

FIFO assumes the oldest inventory is sold first.

If ending inventory = 15 units, we assume the newest inventory remains.

Ending Inventory (15 units):

1. 9 units @ $49 = $441
2. 6 units @ $47 = $282
3. Total Ending Inventory = $723

COGS = Total Available - Ending Inventory

$2,187 - $723 = $1,464

2. LIFO (Last-In, First-Out)

LIFO assumes the newest inventory is sold first.

Ending Inventory (15 units):

1. 15 units from earliest inventory
2. 15 units @ $45 = $675

COGS = $2,187 - $675 = $1,512

3. Weighted Average Cost

Calculate the average cost per unit:

Total Cost / Total Units =

$2,187 / 47 units = $46.53 per unit (rounded)

Ending Inventory = 15 units × $46.53 = $698 (rounded)

COGS = $2,187 - $698 = $1,489

Summary:

Method COGS Ending Inventory
FIFO	$1,464	$723
LIFO	$1,512	$675
Weighted Avg	$1,489	$698

Answer 2

You are missing how many units were sold.

Assuming 25 units were sold.

FIFO (First in First Out) - 20 units @$45 + 5 units @$47 = $1,135 Cost of Goods Sold

$2,187 - $1,135 = $1,052 Remaining Inventory

LIFO (Last in First Out) - 9 units @$49 + 16 units @$47 = $1,193 Cost of Goods Sold

$2,187 - $1,193 = $994 Remaining Inventory

Weighted Average Cost - $2,187 / 47 units = $46.53 per unit.

25 * $46.53 = $1,163.25 Cost of Goods Sold

$2,187 - $1,163.25 = $1,023.75 Remaining Inventory