Causwell Company began 2016 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During 2016 an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the end of 2016 (20,000 units therefore were sold during 2016). Causwell uses a periodic inventory system. Cost of goods sold for 2016, applying the average cost method, is $115,000. The company is interested in determining what cost of goods sold would have been if the FIFO or LIFO methods were used. Required: 1. Determine the cost of goods sold for 2016 using the FIFO method. [ Hint: Determine the cost per unit of 2016 purchases.] 2. Determine the cost of goods sold for 2016 using the LIFO method.
Causwell Company began 2016 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During 2016 an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the end of 2016 (20,000 units therefore were sold during 2016). Causwell uses a periodic inventory system. Cost of goods sold for 2016, applying the average cost method, is $115,000. The company is interested in determining what cost of goods sold would have been if the FIFO or LIFO methods were used. Required: 1. Determine the cost of goods sold for 2016 using the FIFO method. [ Hint: Determine the cost per unit of 2016 purchases.] 2. Determine the cost of goods sold for 2016 using the LIFO method.
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