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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

When the merchandise manager for Ritz Fashions (Exercise 3) took physical inventory on December 31, 128 silk ties remained in inventory.

Calculate the dollar value of the 128 ties by using FIFO.

105 @ 53 .25 = 5,591 .25 23 128  @ 50 .00 =  1 , 150.00 _

Calculate the dollar value of the 128 ties by using LIFO.

59  @ 46 .10 = 2,719 .90 69 128  @ 43 .50 =  3 , 001.59 _

Calculate the dollar value of the 128 ties by using the average cost method.

Average cost =  22 , 053.65 454  = $48 .58 per unit 128  ×  48 .58 =

Calculate the total number of imported silk ties available for sale and the cost of goods available for sale from the following inventory figures for Ritz Fashions. Inc.

UnitsDate Purchased Cost perUnit Total Cost
Beginning Inventory, January 1 59 $46.10
Purchase. March 29 75 43.50
Purchase. July 14 120 47.75
Purchase. October 12 95 50.00
Purchase. December 8 105 53.25
Total Units Available Cost of Goods Available for Sale

(a)

To determine

To calculate: The dollar value of the 128 ties with the help of FIFO method of inventory pricing for Ritz Fashion, Inc.

DateUnitPurchasedCost per UnitTotalCostBeginning Inventory, January 159$46.10___Purchase, March297543.50___Purchase, July 1412047.75___Purchase, October 12Purchase, December 89510550.0053.25___Washing Machines Avalable for sale___cost of goods Available for sale___

Explanation

Given Information:

It is given that when the buyer took physical inventory of the washing machines on December 31, 128 units remained in the inventory.

The information of the inventory is given as follows in the table:

UnitsCost105$53.252350.00128¯

Formula used:

Use following steps for FIFO method of inventory pricing-

Step1. Write the list of the number of units on hand at the end of the year and their corresponding costs starting with the ending balance and then work backward through the income shipments.

Step2. Multiply the number of units by the corresponding cost per units for each purchase.

Step3. Calculate the value of ending inventory by totaling the extension from step 2.

Calculation:

To calculate the dollar value of ending inventory by using FIFO,

List the ending inventory with cost in reverse order of acquisition.

And multiply the units with per unit cost as,

105×53.25=5,591.2523×50.00=1,150.00

Now add all values of cost as,

5,591

(b)

To determine

To calculate: The dollar value of 128 ties with the help of LIFO method of inventory pricing.

UnitsCost5946.106943.50128__¯

(c)

To determine

To calculate: The dollar value of 128 ties with the help of average cost method.

The table is given as follows:

DateUnitPurchasedCost per UnitTotalCostBeginning Inventory, January 159$46.10___Purchase, March297543.50___Purchase, July 1412047.75___Purchase, October 12Purchase, December 89510550.0053.25___Washing Machines Avalable for sale___cost of goods Available for sale___

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