Cost flow assumptions: Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs. To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

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Answer 1

Question

Chapter 6, Problem 6.1BPE

(a)

To determine

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

(b)

To determine

Gross profit and ending inventory under Last-in-first out (LIFO) method.

(c)

To determine

Gross profit and ending inventory under weighted average inventory method.

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Ch 9 Problem Set B Problem 9-1 Part B The company uses the perpetual inventory method. It began the month of March with 100 units of inventory, at a unit cost of $55. Purchases during March March 5, 60 units at $60 each. March 18, 200 units at $65 each March 29, 40 units at $75 each. Sales during March March 12, 60 units. March 25, 210 units. All units were sold to customer for $100 each. 1. Use the following format to set up this inventory costing problem, as shown in Video #2. Inventory Date Units Cost per Total Cost Date Units Total Cost Unit Beg Balance Units Cost Beginning Balance + Purchases Goods Available for Sale - Sold Ending Balance

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Bramble Company reports the following for the month of June. Assume a sale of 500 units occurred on June 15 for a selling price of $12 and a sale of 450 units on June 27 for $13 . a1. Calculate cost of goods available for sale. The cost of goods available for sale a2. Calculate Moving-Average unit cost for June 1,12,15,23 & 27 a3. Calculate the cost of the amount ending inventory and the cost of goods sold for each cost flow assumption using a perpetual inventory system

Answer 2

Question

Chapter 6, Problem 6.1BPE

(a)

To determine

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

(b)

To determine

Gross profit and ending inventory under Last-in-first out (LIFO) method.

(c)

To determine

Gross profit and ending inventory under weighted average inventory method.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.1BPE

(a)

To determine

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

(b)

To determine

Gross profit and ending inventory under Last-in-first out (LIFO) method.

(c)

To determine

Gross profit and ending inventory under weighted average inventory method.

Expert Solution & Answer

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See solution

Answer 4

Question

Chapter 6, Problem 6.1BPE

(a)

To determine

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

(b)

To determine

Gross profit and ending inventory under Last-in-first out (LIFO) method.

(c)

To determine

Gross profit and ending inventory under weighted average inventory method.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 6.1BPE

(a)

To determine

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

(b)

To determine

Gross profit and ending inventory under Last-in-first out (LIFO) method.

(c)

To determine

Gross profit and ending inventory under weighted average inventory method.

Answer 6

Chapter 6, Problem 6.1BPE

(a)

To determine

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

Answer 7

Chapter 6, Problem 6.1BPE

(a)

To determine

Cost flow assumptions:

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. It differs from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

To determine: Gross profit and ending inventory under First-in-first out (FIFO) method.

Answer 8

(b)

To determine

Gross profit and ending inventory under Last-in-first out (LIFO) method.

Answer 9

(b)

To determine

Gross profit and ending inventory under Last-in-first out (LIFO) method.

Answer 10

(c)

To determine

Gross profit and ending inventory under weighted average inventory method.

Answer 11

(c)

To determine

Gross profit and ending inventory under weighted average inventory method.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 6 - Before inventory purchases are recorded, the...Ch. 6 - Why is it important to periodically take a...Ch. 6 - Do the terms FIFO, LIFO, and weighted average...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Which of the three methods of inventory...Ch. 6 - If inventory is being valued at cost and the price...Ch. 6 - Using the following data, how should the inventory...Ch. 6 - Prob. 8DQ Ch. 6 - Hutch Co. sold merchandise to Bibbins Company on...Ch. 6 - A manufacturer shipped merchandise to a retailer...

Solution Summary: The author explains the cost flow assumptions, which determine the flow of costs when an inventory is sold.

Concept explainers

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Gross profit and ending inventory under Last-in-first out (LIFO) method.

Gross profit and ending inventory under weighted average inventory method.

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Chapter 6 Solutions