The following is a chart of the inventory purchases in the last year Number of Units Unit Cost Sales Price 150 $21 Beginning Inventory Jul. 1 Sold Jul. 5 120 $36 225 27 Purchased Jul. 10 Sold Jul. 15 180 39 Purchased Jul. 25 210 33 Ending Inventory Jul. 31 285 Assume that 300 units were sold in the fiscal year. Calculate the Cost of Goods Sold for the fiscal year for Global Tracking Inc. under the LIFO, FIFO and Average Cost inventory valuation methods. If the company wants to have a higher balance in the Inventory Account on the Balance Sheet which method should it use?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 1TIF: Ethics in action Dash Riprock is a cost analyst with Safe Insurance Company. Safe is applying...
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Question
Criteria
Total
1.5%
LIFO Calculation
FIFO Calculation
1.5%
1.5%
Average Cost Calculation
Inventory Question
.5%
Total
5%
You work for Global Tracking Inc. a company that sells a real-time tracking bracelet that tracks patients
and nurses in different healthcare environments using GPS technology. designed for individuals who wish
to monitor others' whereabouts. There has been an increase in demand for the product has spiked during
the current fiscal period, while supply is limited, causing the selling price to escalate rapidly. Note: For
simplicity of demonstration, beginning inventory cost is assumed to be $21 per unit for all cost
assumption methods.
The following is a chart of the inventory purchases in the last year
Number of Units Unit Cost Sales Price
150
$21
Beginning Inventory Jul. 1
Sold Jul. 5
120
$36
225
27
Purchased Jul. 10
Sold Jul. 15
180
39
Purchased Jul. 25
210
33
Ending Inventory Jul. 31
285
Assume that 300 units were sold in the fiscal year. Calculate the Cost of Goods Sold for the fiscal year
for Global Tracking Inc. under the LIFO, FIFO and Average Cost inventory valuation methods. If the
company wants to have a higher balance in the Inventory Account on the Balance Sheet which method
should it use?
Transcribed Image Text:Criteria Total 1.5% LIFO Calculation FIFO Calculation 1.5% 1.5% Average Cost Calculation Inventory Question .5% Total 5% You work for Global Tracking Inc. a company that sells a real-time tracking bracelet that tracks patients and nurses in different healthcare environments using GPS technology. designed for individuals who wish to monitor others' whereabouts. There has been an increase in demand for the product has spiked during the current fiscal period, while supply is limited, causing the selling price to escalate rapidly. Note: For simplicity of demonstration, beginning inventory cost is assumed to be $21 per unit for all cost assumption methods. The following is a chart of the inventory purchases in the last year Number of Units Unit Cost Sales Price 150 $21 Beginning Inventory Jul. 1 Sold Jul. 5 120 $36 225 27 Purchased Jul. 10 Sold Jul. 15 180 39 Purchased Jul. 25 210 33 Ending Inventory Jul. 31 285 Assume that 300 units were sold in the fiscal year. Calculate the Cost of Goods Sold for the fiscal year for Global Tracking Inc. under the LIFO, FIFO and Average Cost inventory valuation methods. If the company wants to have a higher balance in the Inventory Account on the Balance Sheet which method should it use?
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