Better Bottles, Inc., Uses a periodic inventory system and has the following: Description # of Units Cost per Unit Total Cost
Beginning Inventory 20 $20,00 $400,00
Jan. 15 Purchase 27 $22,00 $594,00
Jan. 20 Purchase 33 $30,00 $990,00
Goods Available for Sale 80 $1.984,00
Less: January Sales 36
Ending Inventary 44
Required:
1) Calculate both the Ending Inventory and Cost of Goods Sold using Periodic FIFO. c
FIFO Ending Inventory
Description # of Units Cost per Unit Total Cost
Jan. 20 Purchase
Jan. 15 Purchase
2) Calculate both the Ending Inventory and Cost of Goods Sold using Periodic LIFO.
LIFO Ending Inventory
Description #of Units Cost per Unit Total Cost
Beginning Inventory
Jan. 15 Purchase
3) Using Periodic Weighted Average, first calculate the cost per unit using the formula below. 42 Next, apply that same cost per unit to calculate both the Ending Inventory and Cost of Goods Sold.
Weighted Average Cost = Cost of Goods Available for Sale / Number of Units Available for Sale = per unit
4) Use the given Information and your calculated numbers to complete the cost of Goods Sold.
Beginning Inventory 60
Add: Purchases 61
Goods Available for Sale 62
Less: Ending Inventory 63.
Cost of Goods Sold

Answer and Explanation:

1. The computation of the ending inventory and the cost of goods sold using the periodic FIFO method is shown below;

                                         FIFO Ending Inventory

Description               # of Units      Cost per Unit         Total Cost

Jan. 20 Purchase       33                  $30                          $990

Jan. 15 Purchase       11                    $22                         $242

Total                           44                                                 $1,232

                                      FIFO Cost of goods sold

Description               # of Units      Cost per Unit         Total Cost

Jan. 20 Purchase        20                $20                          $400

Jan. 15 Purchase        16                 $22                          $352

Total                           36                                                  $752

2. The computation of the ending inventory and the cost of goods sold using the periodic LIFO method is shown below;

                                          FIFO Ending Inventory

Description               # of Units      Cost per Unit         Total Cost

Jan. 20 Purchase       20                   $20                        $400

Jan. 15 Purchase       24                    $22                         $528

Total                           44                                                 $928

                                     FIFO Cost of goods sold

Description               # of Units      Cost per Unit         Total Cost

Jan. 20 Purchase       33                 $30                          $990

Jan. 15 Purchase       3                   $22                          $66

Total                           44                                                 $1,056

3. The computation of the cost per unit using the Periodic Weighted Average method is

= Cost of goods sold ÷ Number of units

= $1,984 ÷ 80

= $24.80 per unit

                                 Weighted average Ending inventory

# of Units      Cost per Unit         Total Cost

44                    $24.80                  $1,091

                                Weighted average Cost of goods sold

# of Units      Cost per Unit         Total Cost

36                $24.80                      $893

4. The computation of the completed cost of goods sold by applying the three methods is

Particulars                       FIFO              LIFO               Weighted average

Beginning Inventory        $400            $400               $400

Add: Purchases                $1,584         $1,584               $1,584

Goods Available for Sale $1,984         $1,984               $1,984

Less: Ending Inventory   -$1,232         -$928                -$1,091        

Cost of Goods Sold          $752           $1,056                $893

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