Asked by Ujjwal Dhakal on May 10, 2024
Verified
Calculate the cost of goods sold under each of the following methods given the information below about purchases and sales during the year. Assume a periodic inventory system. Use four decimal places. 
Sales for March: 95 units
a) ________ FIFO
b) ________ LIFO
c) ________ Weighted-average
Periodic Inventory System
A periodic inventory system is an accounting method where inventory and cost of goods sold are calculated at set intervals, such as monthly or annually.
FIFO
A method of inventory valuation where the first items purchased are the first ones to be sold.
LIFO
A method of inventory valuation where the last items added to inventory are the first ones to be used or sold, standing for Last In, First Out.
- Acquire knowledge of the elementary concepts and processes for calculating the cost of goods sold.
- Gain an understanding of the contrasts between the FIFO, LIFO, and weighted-average techniques for inventory costing.
Verified Answer
b) LIFO (20 × $31) + (65 × $30) + (10 × $25) = $2,820
c) Weighted-average [(50 × $25) + (65 × $30) + (20 × $31)] = $3,820/135 × 95 = $2,688.15
Learning Objectives
- Acquire knowledge of the elementary concepts and processes for calculating the cost of goods sold.
- Gain an understanding of the contrasts between the FIFO, LIFO, and weighted-average techniques for inventory costing.
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