I have 2 questions involving inventory
Question 1.
Your a manager of an auto parts store.Figures below contains your records of the annual inventory figures for windshield wipers. Using the FIFO method of inventory pricing,hat is the dollor value of ending inventory if there were 300 units on hand on Dec.31? Round yur aswer to the nearest dollor.
Answers to choose from
A.3,188
B.3,219
c.3,350
d.3,600
January 1 Beginning inventory 300 units @11.00
March 15 Purchase 150 units @ 10.50
June 10 Purchase 200 units @ 10.75
Sept.22 Purchase 175 units @ 10.00
Dec.10 Purchase 100 units @ 12.00
Then the second question wants the dollor value of the ending inventory using the LIFO method,having the ending inventory on Dec 31 of 500 units.
Answers
A.5,450
b.5,413
c.5,363
d.5,225
Could you please help.thank-you
FIFO-first in, first out
300 @ 11.00
150 @ 10.50
200 @ 10.75
175 @ 10.00
100 @ 12.00
Beginning Inventory Total = 925
Ending Total = 300
Difference = sold = 625
FIFO-first in, first out
Items sold are assumed to be subtracted from the first ones purchased. Go down from the top and subtract from each purchase until you reach the number sold of 625.
300 @ 11.00--sold 300, 0 left
150 @ 10.50--sold 150, 0 left
200 @ 10.75--sold 175, 25 left
175 @ 10.00--sold 0, 175 left
100 @ 12.00--sold 0, 100 left
Calculate value of inventory remaining
25 @ 10.75 = $268.75
175 @ 10.00 = $1750.00
100 @ 12.00 = $1200.00
Total 300 units
268.75 + 1750.00 + 1200.00 = 3218.75
Value of 300 units on hand on Dec.31 = $3219.
Now, you do LIFO-last in, first out
Do the same as I did, except start subtracting from the last purchased until you reach the total sold (bottom to top).
Thank-you for your help,my computer went down yesterday after I put my question in.
To find the dollar value of the ending inventory using the FIFO method, you need to calculate the cost of each purchase in the order they were made until you reach the desired number of units on hand. Then, you multiply the number of units by the cost per unit.
Let's calculate the FIFO method for Question 1:
1. Beginning inventory: 300 units @ $11.00
300 units * $11.00 = $3,300
2. March 15 purchase: 150 units @ $10.50
Since the beginning inventory of 300 units already covers the desired 300 units, we don't need to consider this purchase.
3. June 10 purchase: 200 units @ $10.75
300 + 200 = 500 units (desired ending inventory)
300 units * $11.00 = $3,300 (Cost of beginning inventory)
200 units * $10.75 = $2,150 (Cost of June 10th purchase)
4. September 22 purchase: 175 units @ $10.00
500 - 175 = 325 units still needed
300 units * $11.00 = $3,300 (Cost of beginning inventory)
200 units * $10.75 = $2,150 (Cost of June 10th purchase)
125 units * $10.00 = $1,250 (Cost of September 22nd purchase)
5. December 10 purchase: 100 units @ $12.00
325 - 100 = 225 units still needed
300 units * $11.00 = $3,300 (Cost of beginning inventory)
200 units * $10.75 = $2,150 (Cost of June 10th purchase)
175 units * $10.00 = $1,750 (Cost of September 22nd purchase)
100 units * $12.00 = $1,200 (Cost of December 10th purchase)
The total cost of the ending inventory using the FIFO method is:
$3,300 (Cost of beginning inventory)
+ $2,150 (Cost of June 10th purchase)
+ $1,750 (Cost of September 22nd purchase)
+ $1,200 (Cost of December 10th purchase) = $8,400
Therefore, the dollar value of the ending inventory using the FIFO method is $8,400.
As for the second question using the LIFO method, the same steps are applied, but in reverse order. I will calculate it for you:
1. December 10 purchase: 100 units @ $12.00
500 units - 100 units = 400 units still needed
100 units * $12.00 = $1,200 (Cost of December 10th purchase)
2. September 22 purchase: 175 units @ $10.00
400 - 175 = 225 units still needed
175 units * $10.00 = $1,750 (Cost of September 22nd purchase)
3. June 10 purchase: 200 units @ $10.75
225 - 200 = 25 units still needed
200 units * $10.75 = $2,150 (Cost of June 10th purchase)
4. March 15 purchase: 150 units @ $10.50
25 - 150 = excess units, so this purchase is not needed.
5. Beginning inventory: 300 units @ $11.00
25 units * $11.00 = $275 (Cost of beginning inventory)
The total cost of the ending inventory using the LIFO method is:
$1,200 (Cost of December 10th purchase)
+ $1,750 (Cost of September 22nd purchase)
+ $2,150 (Cost of June 10th purchase)
+ $275 (Cost of beginning inventory) = $4,375
Therefore, the dollar value of the ending inventory using the LIFO method is $4,375.
From the provided answer choices for each question, the correct answers are:
Question 1 (FIFO method): A. $3,188
Question 2 (LIFO method): C. $5,363