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Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 100 units at $60 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 150-unit purchase at $68 per unit; the second was a 200-unit purchase at $72 per unit. During the period, it sold 270 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses a. FIFO. Cost of Goods Sold Ending Inventory b. LIFO. Cost of Goods Sold Ending Inventory c. Weighted average.
Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 100 units at $60 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 150-unit purchase at $68 per unit; the second was a 200-unit purchase at $72 per unit. During the period, it sold 270 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending inventory, assuming that Cortez uses a. FIFO. Cost of Goods Sold Ending Inventory b. LIFO. Cost of Goods Sold Ending Inventory c. Weighted average.
Answer:a. FIFO COGS $ 17640a. FIFO Ending Inventory $ 12960b. LIFO COGS $ 19160b. LIFO ending Inventory $ 11440c. Weighted COGS $ 18360c.Weighted Ending Inventory $12240Explanation:Cortez CompanyParticulars Units unit Cost Total CostOpening Inventory 100 $ 60 $ 6000Purchases 150 $ 68 10200Batch 2 200 $ 72 $ 14400Total 450 $30600FIFO means first units received will be sold out first and the ending inventory consists of last units.Sales = 270 unitsa. FIFO COGS $ 17640100 units at $ 60 = $ 6000150 units at $ 68 = 1020020 units at $ 72 = $1440a. FIFO Ending Inventory $ 12960180 units at $ 72 =$ 12960LIFO means last units received will be sold out first and the ending inventory consists of first units.b. LIFO COGS $ 19160200 units at $ 72 = $ 1440070 units at $ 68 = 4760b. LIFO ending Inventory $ 11440100 units at $ 60= $ 600080 units at $ 68 = 5440c. Weighted Average Cost = Total Cost/ No of units = $30600 /450= $ 68c. Weighted COGS = 270 units at $ 68= $ 18360c. Weighted Ending Inventory= (Total Units - Sales) CP per unit= (450- 270)* 68= 180 *68=$12240...