financial-accounting

Inventory Costing Methods

Crandall Distributors uses a perpetual inventory system and has the following data available for inventory, purchases, and sales for a recent year:

Activity Units Purchase Price 

(per unit) Sale Price 

(per unit)

Beginning inventory 110 $7.10

Purchase 1, Jan. 18 575 7.20

Sale 1 380 $12.00

Sale 2 225 12.00

Purchase 2, Mar. 10 680 7.50

Sale 3 270 12.00

Sale 4 290 12.50

Purchase 3, Sept. 30 230 7.70

Sale 5 240 12.50

Required:

1.  Compute the cost of ending inventory and the cost of goods sold using the specific identification method. Assume the ending inventory is made up of 40 units from beginning inventory, 30 units from Purchase 1, 80 units from Purchase 2, and 40 units from Purchase 3.

Cost of ending inventory $

Cost of goods sold $

2.  Compute the cost of ending inventory and cost of goods sold using the FIFO inventory costing method.

Cost of ending inventory $

Cost of goods sold $

3.  Compute the cost of ending inventory and cost of goods sold using the LIFO inventory costing method.

Cost of ending inventory $

Cost of goods sold $

4.  Compute the cost of ending inventory and cost of goods sold using the average cost inventory costing method. (Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.)

Cost of ending inventory $

Cost of goods sold $