Question: Causwell Company began 2016 with 30,000 units of inventory on hand. The cost of each unit was $5.00. During 2016, an additional 50,000 units were purchased at a single unit cost, and 40,000 units remained on hand at the end of 2016 (40,000 units therefore were sold during 2016). Causwell uses a periodic inventory system. Cost of goods sold for 2016, applying the average cost method, is $224,000. The company is interested in determining what cost of goods sold would have been, if the FIFO or LIFO methods were used. 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. (Do not round intermediate calculations.)
Question: Causwell Company began 2016 with 30,000 units of inventory on hand. The cost of each unit was $5.00. During 2016, an additional 50,000 units were purchased at a single unit cost, and 40,000 units remained on hand at the end of 2016 (40,000 units therefore were sold during 2016). Causwell uses a periodic inventory system. Cost of goods sold for 2016, applying the average cost method, is $224,000. The company is interested in determining what cost of goods sold would have been, if the FIFO or LIFO methods were used. 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. (Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question:
Causwell Company began 2016 with 30,000 units of
inventory on hand. The cost of each unit was $5.00.
During 2016, an additional 50,000 units were purchased at
a single unit cost, and 40,000 units remained on hand at
the end of 2016 (40,000 units therefore were sold during
2016).
Causwell uses a periodic inventory system. Cost of goods
sold for 2016, applying the average cost method, is
$224,000. The company is interested in determining what
cost of goods sold would have been, if the FIFO or LIFO
methods were used.
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. (Do not round intermediate calculations.)
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