Chapter 16.I, Problem 2RE

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

When the buyer for Superior Electronics (Exercise 1) took physical inventory of the Blu-ray players on July 31, 64 units remained in inventory.

a. Calculate the dollar value of the 64 Blu-ray players by using FIFO.

Units |
Cost/Unit |
Total |

25 | $135 | $3,375 |

30 | 146 | 4.380 |

9 | 118 | 1.062 |

64 | $8,817 FIFO | |

b. Calculate the dollar value of the 64 Blu-ray players by using LIFO. | ||

Units |
Cost/Unit |
Total |

40 | $125 | $5,000 |

24 | 118 | 2.832 |

64 | $7.832 LIFO |

c. Calculate the dollar value of the 64 Blu-ray players by using the average cost method. Round average cost to the nearest cent.

Average cost ==

=130.165 = $130.17 each

Inventory value =

**(a)**

To determine

**To calculate:** The dollar value of 64 Blue-ray players with the help of FIFO method of inventory pricing.

Explanation

**Given Information:**

It is given that when a buyer took physical inventory of the Blu-ray players on July 31, 64 units remained in the inventory at Superior Electronics.

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

**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:**

Consider the provided table:

List the ending inventory with cost in reverse order of acquisition

**(b)**

To determine

**To calculate:** The dollar value of 64 Blue-ray players with the help of LIFO method of inventory pricing.

**(c)**

To determine

**To calculate:** The dollar value of 64 Blue-ray players with the help of average cost method.

The table is given as follows:

Sect-16.I P-1TIESect-16.I P-2TIESect-16.I P-3TIESect-16.I P-4TIESect-16.I P-1RESect-16.I P-2RESect-16.I P-3RESect-16.I P-4RESect-16.I P-5RESect-16.I P-6RE

Sect-16.I P-7RESect-16.I P-8RESect-16.I P-9RESect-16.I P-10RESect-16.II P-5TIESect-16.II P-6TIESect-16.II P-1RESect-16.II P-2RESect-16.II P-3RESect-16.II P-4RESect-16.II P-5RESect-16.II P-6RESect-16.II P-7RESect-16.II P-8RESect-16.II P-9RESect-16.III P-7TIESect-16.III P-8TIESect-16.III P-9TIESect-16.III P-1RESect-16.III P-2RESect-16.III P-3RESect-16.III P-4RESect-16.III P-5RESect-16.III P-6RESect-16.III P-7RESect-16.III P-8RESect-16.III P-9RESect-16.III P-10RESect-16.III P-11RESect-16.III P-12RESect-16.III P-13RESect-16.III P-14RESect-16.III P-15RECh-16 P-1CRCh-16 P-2CRCh-16 P-3CRCh-16 P-4CRCh-16 P-5CRCh-16 P-6CRCh-16 P-7CRCh-16 P-8CRCh-16 P-9CRCh-16 P-10CRCh-16 P-11CRCh-16 P-12CRCh-16 P-13CRCh-16 P-14CRCh-16 P-1ATCh-16 P-2ATCh-16 P-3ATCh-16 P-4ATCh-16 P-5ATCh-16 P-6ATCh-16 P-7ATCh-16 P-8ATCh-16 P-9ATCh-16 P-10ATCh-16 P-11ATCh-16 P-12ATCh-16 P-13AT

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