Describe the two valuation systems of inventory Weighted Average Cost Method (3) FIFO method (2)
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This method smooths out price fluctuations over time by averaging the costs of inventory purchases. Show more…
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Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 2,500 units at $5 Feb. 17 Purchase 3,300 units at $6 July 21 Purchase 3,000 units at $7 Nov. 23 Purchase 1,200 units at $8 There are 1,500 units of the item in the physical inventory at December 31. The periodic inventory system is used. a. Determine the inventory cost by the first-in, first-out method. $ b. Determine the inventory cost by the last-in, first-out method. $ c. Determine the inventory cost by the weighted average cost method. $
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Table 1 Assume the following data for ABC Company Sales for November 2023: Beginning inventory: 10 units at $7 each Nov. 1 purchase: 15 units at $9 each Sale: 20 units at $15 each Nov. 2 purchase: 20 units at $10 each Sale: 12 units at $15 each Nov. 3 purchase: 12 units at $11 each Sale: 10 units at $16 each On November 30, a physical count reveals 15 units on hand. 2) Refer to Table 1. Calculate ending inventory for ABC Company Sales assuming the perpetual moving-weighted-average-cost method is being used. 3) Refer to Table 1. Calculate gross margin for ABC Company Sales assuming the perpetual moving-weighted-average-cost method is being used. 4) Refer to Table 1. Calculate ending inventory for ABC Company Sales assuming the perpetual FIFO cost method is being used. 5) Refer to Table 1. Calculate gross margin for ABC Company Sales assuming the perpetual FIFO cost method is being used.
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