Calculating Cost of Sales and Ending Inventory

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What is the total Cost of Sales based on the FIFO inventory costing method?

$6,000

$20,000

$8,040

$15,760 (correct)

How many units were in the Ending Inventory using the FIFO inventory costing method?

6 units

4 units (correct)

5 units

3 units

What was the cost per unit for the purchases made on 3 March using the FIFO method?

$1,608 (correct)

$1,620

$1,680

$1,500

What was the total cost of goods sold for all transactions using the FIFO method?

$12,000 Signup and view all the answers

Why are the Cost of Sales and Ending Inventory figures different for the two methods?

Inventory purchase prices rose during the period Signup and view all the answers

What is the impact of using FIFO on Ending Inventory and Cost of Sales?

Ending Inventory is higher and Cost of Sales is lower Signup and view all the answers

Which costing method is determined by factors such as the nature of inventory and management objectives?

FIFO Signup and view all the answers

In the context of the text, what would LIFO method focus on?

Selling newest inventory first Signup and view all the answers

What does Average Cost method calculate to determine inventory valuation?

Average cost of all inventory items Signup and view all the answers

Which inventory costing method gives the highest profit for April according to the text?

FIFO because it results in a higher profit Signup and view all the answers

Calculating Cost of Sales and Ending Inventory

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Questions and Answers

What is the total Cost of Sales based on the FIFO inventory costing method?

How many units were in the Ending Inventory using the FIFO inventory costing method?

What was the cost per unit for the purchases made on 3 March using the FIFO method?

What was the total cost of goods sold for all transactions using the FIFO method?

Why are the Cost of Sales and Ending Inventory figures different for the two methods?

What is the impact of using FIFO on Ending Inventory and Cost of Sales?

Which costing method is determined by factors such as the nature of inventory and management objectives?

In the context of the text, what would LIFO method focus on?

What does Average Cost method calculate to determine inventory valuation?

Which inventory costing method gives the highest profit for April according to the text?

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