Rogers Products uses a periodic inventory system. The company’s records show the beginning inventory of PH4 oil filters on January 1 and the purchases of this item during the current year to be as follows. Jan. 1 Beginning inventory 11 units @ $ 3.00 $ 33.00 Feb. 23 Purchase 14 units @ $ 3.50 49.00 Apr. 20 Purchase 28 units @ $ 3.80 106.40 May 4 Purchase 40 units @ $ 4.00 160.00 Nov. 30 Purchase 18 units @ $ 5.00 90.00 Totals 111 units $ 438.40 A physical count indicates 24 units in inventory at year-end. Determine the cost of the ending inventory on the basis of each of the following methods of inventory valuation. (Remember to use periodic inventory costing procedures.) (Round your intermediate and final answers to 2 decimal places.) ending inventory Average cost FIFO LIFO
Rogers Products uses a periodic inventory system. The company’s records show the beginning inventory of PH4 oil filters on January 1 and the purchases of this item during the current year to be as follows.
| Jan. 1 | Beginning inventory | 11 | units | @ | $ | 3.00 | $ | 33.00 | |||
| Feb. 23 | Purchase | 14 | units | @ | $ | 3.50 | 49.00 | ||||
| Apr. 20 | Purchase | 28 | units | @ | $ | 3.80 | 106.40 | ||||
| May 4 | Purchase | 40 | units | @ | $ | 4.00 | 160.00 | ||||
| Nov. 30 | Purchase | 18 | units | @ | $ | 5.00 | 90.00 | ||||
| Totals | 111 | units | $ | 438.40 | |||||||
A physical count indicates 24 units in inventory at year-end.
Determine the cost of the ending inventory on the basis of each of the following methods of
ending inventory
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Average cost |
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FIFO |
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LIFO |
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LIFO means last in first out where as FIFO means first in first out.
Inventory and cost of goods sold can be value on the basis of FIFO or LIFO basis.
In LIFO , cost of goods sold is valued at latest price and closing inventory at oldest price.
In FIFO , cost of goods sold is valued at oldest price and closing inventory at latest price.
In weighted average , an average price is calculated by taking quantity as weight and cost of goods sold and closing inventory is valued at that price.
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