Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit....

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Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit. During the year, purchases were:

Feb. 20	300	@	$9	Aug. 12	600	@	$11
May 5	500	@	$10	Dec. 8	200	@	$12

Milo Company uses a periodic inventory system. Sales totaled 1,500 units.

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Determine the cost of goods available for sale.

The cost of goods available for sale

$

19,000

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Calculate the weighted-average unit cost. (Round answer to 2 decimal places, e.g. $2.25.)

Weighted-average unit cost

$

9.95

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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). (Round answers to 0 decimal places, e.g. $2,120.)

FIFO	LIFO	AVERAGE-COST
The ending inventory	$9,000	$3,800	$
The cost of goods sold	$13,100	$15,200	$

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Which cost flow method results in (1) the lowest inventory amount for the balance sheet, and (2) the lowest cost of goods sold for the income statement?

(1)	FIFOLIFOEQAT_1369730975900_0_19577614165856134_017_resp_2 results in the lowest inventory amount for the balance sheet, $.
(2)	FIFOLIFOEQAT_1369730975900_0_19577614165856134_022_resp_1 results in the lowest cost of goods sold, $.

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Robert · Accepted Answer

a) Computation of Cost of Goods available for Sale 
 
Particulars 
 
Units Rate Total Cost 
Opening Inventory 
 
400 $8 $3,200 
Purchase on 20-Feb 
 
300 $9 $2,700 
Purchase on 05-May 
 
500 $10 $5,000 
Purchase on 12-Aug 
 
600 $11 $6,600 
Purchase on 08-Dec 
 
200 $12 $2,400 
Cost of goods available for sale 2000 
 
$19,900 
b) Computation of weighted-average unit cost 
  
Average Unit Cost = Cost of Goods available for sale / Total Units 
= 19,900 / 2,000 
  
= $9.

Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit. During the year, purchases were: Feb. 20 300 @ $9 Aug. 12 600 @ $11 May 5 500 @ $10 Dec. 8 200 @ $12 Milo...

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