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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 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 == 16 , 531 127

=130.165 = $130.17 each

Inventory value =   64   ×   130.17   = $ 8 , 330.88

(a)

To determine

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

UnitsCost/Unit25$135301469118

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:

UnitsCost/Unit25$135301469118

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:

UnitsCost/Unit25$135301469118

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.

UnitsCost/Unit40$12524118

(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:

Superior ElectronicsSonic Blue-ray Player InventoryDateUnitPurchasedCost per UnitTotalCostBeginning Inventory, January140$125$5,000Purchase, February,20321183,776Purchase301464,380Purchase251353,375              Blueray Player Avalable for sale127cost of goods Available for sale$16,531

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