ADM 1340 Quiz: Inventory Example.doc
28 Jan 2014
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The beginning inventory and the following sequence of purchases were made by the clapton. There were also two sales made during the month. The first sale was on april 15 for 250 units. The second sale was on april 29 for 520 units. Under the fifo cost flow assumption, the same answer will be mathematically derived for ending inventory and cogs irrespective whether a periodic or perpetual inventory system is used. Solution: average cost flow assumption method and periodic inventory system. Total # units available for sale = 200 + 100 + 200 + 200 + 200 + 200 + 100 = 1000. Total cost of units available = 1600 + 900 + 2000 + 2000 + 2000 + 2200 + 1200 = 9900. # of units sold = 250 + 520 = 770. # of units in ending inventory = total units units sold = 1000 770 = 230. Average cost per unit = 9900 / 1000 = 9. 9.
