Cullumber Company markets CDs of numerous performing artists. At the beginning of March, Cullumber Company had in beginning inventory 2,690 CDs with a unit cost of $7. During March, Cullumber Company made the following purchases of CDs. March 5 1,810 @ $8 March 21 4,630 @ $10 March 13 3,180 @ $9 March 26 2,100 @ $11 During March 11,470 units were sold. Cullumber Company uses a periodic inventory system. Your answer is partially correct. Try again. (a) Determine the cost of goods available for sale. The cost of goods available for sale $ (b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.) Average Cost $ 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. 125.) FIFO LIFO AVERAGE-COST The ending inventory $ $ $ The cost of goods sold $ $ $ Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement? (1) Average-cost FIFO LIFO produces the highest inventory amount. (2) Average-cost FIFO LIFO produces the highest cost of goods sold.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 51E: Inventory Costing Methods On June 1, Welding Products Company had a beginning inventory of 210 cases...

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Cullumber Company markets CDs of numerous performing artists. At the beginning of March, Cullumber Company had in beginning inventory 2,690 CDs with a unit cost of $7. During March, Cullumber Company made the following purchases of CDs.

March 5		1,810		@		$8		March 21		4,630		@		$10
March 13		3,180		@		$9		March 26		2,100		@		$11

During March 11,470 units were sold. Cullumber Company uses a periodic inventory system.


	Your answer is partially correct. Try again.

(a) Determine the cost of goods available for sale.

The cost of goods available for sale

(b) Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.)

Average Cost

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. 125.)

	FIFO	LIFO	AVERAGE-COST
The ending inventory	$	$	$
The cost of goods sold	$	$	$

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

(1)		Average-cost FIFO LIFO produces the highest inventory amount.
(2)		Average-cost FIFO LIFO produces the highest cost of goods sold.

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