Laker Company reported the following January purchases and sales data for its only product. Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 210 units @ $ 13.50 = $ 2,835 Jan. 10 Sales 160 units @ $ 22.50 Jan. 20 Purchase 150 units @ $ 12.50 = 1,875 Jan. 25 Sales 180 units @ $ 22.50 Jan. 30 Purchase 340 units @ $ 12.00 = 4,080 Totals 700 units $ 8,790 340 units Exercise 5-5A Periodic: Inventory costing LO P3 Required: The Company uses a periodic inventory system. For specific identification, ending inventory consists of 360 units, where 340 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Laker Company reported the following January purchases and sales data for its only product.
| Date | Activities | Units Acquired at Cost | Units sold at Retail | ||||||||||||||
| Jan. | 1 | Beginning inventory | 210 | units | @ | $ | 13.50 | = | $ | 2,835 | |||||||
| Jan. | 10 | Sales | 160 | units | @ | $ | 22.50 | ||||||||||
| Jan. | 20 | Purchase | 150 | units | @ | $ | 12.50 | = | 1,875 | ||||||||
| Jan. | 25 | Sales | 180 | units | @ | $ | 22.50 | ||||||||||
| Jan. | 30 | Purchase | 340 | units | @ | $ | 12.00 | = | 4,080 | ||||||||
| Totals | 700 | units | $ | 8,790 | 340 | units | |||||||||||
Exercise 5-5A Periodic: Inventory costing LO P3
Required:
The Company uses a periodic inventory system. For specific identification, ending inventory consists of 360 units, where 340 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average
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