Being inventory of 12 sets of paints at a cost of $1.50 each. During the year the store purchased 4 sets at $1.60, 6 sets at $2.20, 6 sets at $2.50, and 10 sets at $3.00. By the end of the year, 25 sets were sold. Caculate the number of paint sets in stock and the cost of ending inventory under LIFO, FIFO and the weighted average method.Round to nearest cent for weight average.
12.00
I feel really bad now. No one has responded to this question in years. Did you ever get your question answered? I mean, I'd love to answer your question but math isn't my thing.
To calculate the number of paint sets in stock using LIFO (Last-In, First-Out), FIFO (First-In, First-Out), and the weighted average method, we'll need to follow these steps:
Step 1: Calculate the number of sets available at the beginning of the year.
Step 2: Calculate the total number of sets purchased throughout the year.
Step 3: Calculate the number of sets sold during the year.
Step 4: Calculate the number of sets remaining in stock.
Step 5: Calculate the cost of ending inventory using LIFO.
Step 6: Calculate the cost of ending inventory using FIFO.
Step 7: Calculate the weighted average cost per set.
Step 8: Calculate the cost of ending inventory using the weighted average method.
Let's begin with step 1:
Step 1: Calculate the number of sets available at the beginning of the year.
Given: Beginning inventory = 12 sets.
Step 2: Calculate the total number of sets purchased throughout the year.
Given:
4 sets purchased at $1.60 each
6 sets purchased at $2.20 each
6 sets purchased at $2.50 each
10 sets purchased at $3.00 each
Total sets purchased = 4 + 6 + 6 + 10 = 26 sets.
Step 3: Calculate the number of sets sold during the year.
Given: Sets sold = 25 sets.
Step 4: Calculate the number of sets remaining in stock.
Number of sets remaining = Inventory at the beginning of the year + Total sets purchased - Sets sold
Number of sets remaining = 12 + 26 - 25 = 13 sets.
Now, let's move on to calculating the costs using LIFO, FIFO, and the weighted average methods:
Step 5: Calculate the cost of ending inventory using LIFO.
For LIFO, we assume that the most recently purchased sets are sold first. Therefore, the cost of ending inventory will be based on the cost of the most recently purchased sets.
Cost of ending inventory using LIFO = Number of sets remaining * Cost per set
Cost of ending inventory using LIFO = 13 sets * $3.00 = $39.00.
Step 6: Calculate the cost of ending inventory using FIFO.
For FIFO, we assume that the sets purchased first are sold first. Therefore, the cost of ending inventory will be based on the cost of the sets purchased earlier.
Cost of ending inventory using FIFO = Number of sets remaining * Cost per set
Cost of ending inventory using FIFO = 13 sets * $1.50 = $19.50.
Step 7: Calculate the weighted average cost per set.
To calculate the weighted average cost per set, we need to determine the total cost of all sets purchased and divide it by the total number of sets.
Total cost of all sets purchased = (4 sets * $1.60) + (6 sets * $2.20) + (6 sets * $2.50) + (10 sets * $3.00)
Total cost of all sets purchased = $6.40 + $13.20 + $15.00 + $30.00 = $64.60.
Total number of sets purchased = 4 + 6 + 6 + 10 = 26 sets.
Weighted average cost per set = Total cost of all sets purchased / Total number of sets purchased
Weighted average cost per set = $64.60 / 26 = $2.48 (rounded to the nearest cent).
Step 8: Calculate the cost of ending inventory using the weighted average method.
For the weighted average method, we multiply the number of sets remaining by the weighted average cost per set.
Cost of ending inventory using the weighted average method = Number of sets remaining * Weighted average cost per set
Cost of ending inventory using the weighted average method = 13 sets * $2.48 = $32.24 (rounded to the nearest cent).
In conclusion:
- The number of paint sets in stock is 13 sets for all three methods.
- The cost of ending inventory is:
- LIFO: $39.00
- FIFO: $19.50
- Weighted average method: $32.24 (rounded to the nearest cent).
To calculate the number of paint sets in stock and the cost of ending inventory under LIFO, FIFO, and the weighted average method, we need to follow these steps:
1. Calculate the number of paint sets purchased during the year for each cost:
- Sets purchased at $1.60: 4 sets
- Sets purchased at $2.20: 6 sets
- Sets purchased at $2.50: 6 sets
- Sets purchased at $3.00: 10 sets
2. Calculate the total sets purchased during the year:
Total sets purchased = 4 sets + 6 sets + 6 sets + 10 sets = 26 sets
3. Calculate the number of sets sold: 25 sets
4. Calculate the number of sets in stock:
Number of sets in stock = Initial inventory + Total sets purchased - Number of sets sold
= 12 sets + 26 sets - 25 sets
= 13 sets
Now, let's calculate the ending inventory cost under LIFO, FIFO, and the weighted average method.
LIFO (Last In, First Out) Method:
1. Calculate the cost of ending inventory using the cost of the most recent purchases:
Ending inventory cost (LIFO) = Sets purchased at $3.00 x cost + Sets purchased at $2.50 x cost + Sets purchased at $2.20 x cost + Sets purchased at $1.60 x cost
= 10 sets x $3.00 + 6 sets x $2.50 + 6 sets x $2.20 + 4 sets x $1.60
= $30.00 + $15.00 + $13.20 + $6.40
= $64.60
FIFO (First In, First Out) Method:
1. Calculate the cost of ending inventory using the cost of the initial purchases:
Ending inventory cost (FIFO) = Initial inventory x cost + Sets purchased at $1.60 x cost + Sets purchased at $2.20 x cost + Sets purchased at $2.50 x cost
= 12 sets x $1.50 + 4 sets x $1.60 + 6 sets x $2.20 + 6 sets x $2.50
= $18.00 + $6.40 + $13.20 + $15.00
= $52.60
Weighted Average Method:
1. Calculate the total cost of all purchases:
Total cost of all purchases = (Sets purchased at $1.50 x cost) + (Sets purchased at $1.60 x cost) + (Sets purchased at $2.20 x cost) + (Sets purchased at $2.50 x cost) + (Sets purchased at $3.00 x cost)
= 12 sets x $1.50 + 4 sets x $1.60 + 6 sets x $2.20 + 6 sets x $2.50 + 10 sets x $3.00
= $18.00 + $6.40 + $13.20 + $15.00 + $30.00
= $82.60
2. Calculate the weighted average cost per set:
Weighted average cost per set = Total cost of all purchases / Total sets purchased
= $82.60 / 26 sets
= $3.17 (rounded to the nearest cent)
3. Calculate the cost of ending inventory using the weighted average cost per set:
Ending inventory cost (weighted average) = Weighted average cost per set x Number of sets in stock
= $3.17 x 13 sets
= $41.21
Therefore, under LIFO method, the cost of ending inventory is $64.60. Under FIFO method, the cost of ending inventory is $52.60. Under the weighted average method, the cost of ending inventory is $41.21.