Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for the month of July. UnitsUnit CostJuly 1Beginning Inventory3,500$21 July 13Purchased1,400 22 July 17Purchased2,100 23 July 25Purchased1,400 24 July 27Sold6,700 Calculate the cost of goods sold and the ending inventory if Aircard uses (a) FIFO, (b) LIFO, or (c) weighted average costing methods. (Round weighted-average cost per unit to 4 decimal places. Round the final answers to the nearest whole dollar.)

Name: Aircard Corporation tracks the number of units purchased and sold thro
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for t

The Numerical has covered the concept of Valuing Ending Inventory Under FIFO, LIFO, Average Method. For Solving this numerical we have to know some basic Fundamentals of FIFO, LIFO, Average Method. Above Mentioned Concepts are discussed below, 1.FIFO:- The name suggests First in First Out. In this method, the produced or manufactured goods sold out first. 2.LIFO:- The name suggests Last-In-Last-Out. In this method, the produced or manufactured goods Sold out last. 3.Weighted Average Method:- This method is used to allocate the average cost of production to a particular product.The solution to required (a):- Computation of Ending Inventory and Cost Of Goods Sold Under FIFO method:- Cost Of Goods Sold:- Under FIFO we sold out the 1st purchase Here Sales Units = 6,700 Units From Beginning Inventory (July 1) = (3,500 Units * $21) =$73,500 From Purchase July 13= (1,400 Units * $22) = $30,800 From Purchase July 17 = (6,700-3,500-1,400) = 1,800 Units @ $23 = (1,800 *$23) = $41,400 Cost Of Goods Sold = (73,500+30,800+41,400) = $145,700 Ending Inventory From Purchase July 17 = (2,100-1,800) *$23 = $6,900 From Purchase July 25= (1,400 Units* $24 Per Unit) = $33,600 Ending Inventory =$ (6,900+33,600 ) = $40,500 The solution to required (b):- Computation of Ending Inventory and Cost Of Goods Sold Under LIFO method:- Cost Of Goods Sold:- Under LIFO we sold out the Last purchase Here Sales Units = 6,700 Units Units From Purchase July 25 =(1,400 Units* $24 Per Unit) = $33,600 From Purchase July 17= (2,100 Units * $23 Per Unit) = $48,300 From Purchase July 13 = (1,400 Units * $22 Per Unit) = $30,800 From Beginning Inventory (July 1) = (6,700-1,400-2,100-1,400)= 1,800 Units @$21 = (1,800 * $21)= $37,800 Cost Of Goods Sold = $(33,600+48,300+30,800+37,800) = $150,500 Ending Inventory From Beginning Inventory (July 1) =(3,500-1,800)= 1,700 Units @$21 Per Unit = (1,700 * $21)= $35,700 Ending Inventory = $35,700. Other items are sold out that's why they will not appear in the ending inventory. The solution to required (c):- Computation of Ending Inventory and Cost Of Goods Sold Under Average Cost method:- Step 1;- Computation Of Cost Per Unit = Total Cost Available For Sale / Total Units Available For Sale = [(3,500 Units * $21 Per Unit) + (1,400 Units * $22 Per Unit) + (2,100 Units * $23Per Unit)+(1,400 Units * $24 Per Unit)] / (3,500+1,400+2,100+1,400) Units = ($73,500 + $30,800 + $48,300+$33,600) / 8,400 Units = $186,200 / 8,400 Units = $22.1667 Per unit Step 2:- Cost Of Goods Sold Under Average Cost method = ( Cost Per Unit * Sales Units During The Year) = ($22.1667 Per unit * 6,700 Units) = $148,517 Step 3;- Ending Inventory Under Average Cost method Units in Ending Inventory = (Total Units Available For Sale - Unit Sold Out) = (8,400 - 6,700) Units = 1,700 Units Cost Of Ending Inventory:- = ( Cost Per Unit * Units In Ending Inventory) = ($22.1667 Per unit * 1,700 Units) = $37,683