Sheet1
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Beginning inventory: 200 units @$10/unit = $2,000
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Units sold: 100 units per quarter for a total of 400 units
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Ending inventory (units): 200 +500 - 400 units = 300 units
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Rising Prices
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Rising Prices
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Quarter
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Purchases
Units
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Unit
Cost
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Purchases
Dollars
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Unit
Cost
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Purchases
Dollars
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1
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100
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$10
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$1,000
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$11
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$1,100
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2
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150
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$10
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$1,500
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$12
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$1,800
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3
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150
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$10
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$1,500
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$13
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$1,950
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4
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100
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$10
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$1,000
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$14
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$1,400
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Total
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500
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$5,000
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$6,250
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BI+P=
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$7,000
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BI+P=
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$8,250
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Inventory
method
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COGS
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EI
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COGS*
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EI*
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FIFO
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$4,000
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$3,000
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$4,300
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$3,950
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Weighted average
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$4,000
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$3,000
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$4,714
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$3,536
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LIFO
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$4,000
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$3,000
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$5,150
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$3,100
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* Allocation of costs under different inventory method
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For FIFO
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COGS
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Ending Inventory
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200
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@$10
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$2,000
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50
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@$12
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$600
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100
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@$11
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$1,100
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150
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@$13
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$1,950
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100
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@$12
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$1,200
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100
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@$14
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$1,400
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400
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$4,300
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300
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$3,950
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For LIFO
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COGS
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Ending Inventory
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100
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@$14
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$1,400
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200
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@$10
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$2,000
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150
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@$13
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$1,950
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100
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@$11
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$1,100
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150
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@$12
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$1,800
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400
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$5,150
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300
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$3,100
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For Weighted average
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weighted average unit cost = $8,250 / 700 = $11.786
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COGS = 400 X $11.786 = $4,714
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Ending Inventory = 300 X $11.786 = $3,536
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Sheet2
Sheet3
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