Accounting for inventories and the inventory cost flowmethods
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Question: Giant Corporation uses a perpetualinventory system. The following information related to itsmerchandise inventory during the month of August 2013 isavailable:
Aug. 1 | Inventory on hand â 2,000 units; cost $6.10 each. |
8 | Purchased 10,000 units for $5.50 each. |
14 | Sold 8,000 units for $12.00 each. |
18 | Purchased 6,000 units for $5.00 each. |
25 | Sold 7,000 units for $11.00 each. |
31 | Inventory on hand â 3,000 units. |
Required: Determine the inventory balance Giantwould report in its August 31, 2013, statement of financialposition and the cost of goods sold it would report in its August2013 income statement using each if the following cost flowmethods:
1. First-in, first-out (FIFO)
2. Last-in, first-out (LIFO)
3. Average cost
Understanding the Relationship between Cost Flows, Inventories,and Cost of Goods Sold
Ivano Company has collected cost accounting information for thefollowing subset of items for Years 1 and 2.
Required:
Calculate the values of the missing items.
Year 1 | Year 2 | |
Item: | ||
Direct materials used in production | $ | $50,000 |
Direct materials: Beginning inventory | $10,000 | $ |
Direct materials purchases | 45,000 | $ |
Direct materials: Ending inventory | 15,000 | 17,000 |
Direct labor used in production | $ | 53,000 |
Manufacturing overhead costs used in production | 80,000 | 76,000 |
Work in process: Beginning inventory | 17,000 | 14,000 |
Work in process: Ending inventory | 14,000 | 19,000 |
Finished goods: Beginning inventory | 8,000 | 7,000 |
Finished goods: Ending inventory | 7,000 | 11,000 |
Cost of goods sold | 169,000 | $ |