Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time. Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization. The various inventory cost flow methods are: First-in, first-out (FIFO) Last in, first-out (LIFO) Average-cost FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization. LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period. To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

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Answer 1

Question

Chapter 6, Problem 6.8AP

(a)

(1)

To determine

Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

(2)

To determine

(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

(3)

To determine

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

(b)

To determine

Compare results calculated under all cost-flow methods.

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Lambert Manufacturing uses a predetermined overhead rate of $20.50 per direct labor hour. This predetermined rate was based on a cost formula that estimates $252,500 of total manufacturing overhead for an estimated activity level of 12,300 direct labor hours. The company incurred actual total manufacturing overhead costs of $246,000 and 11,700 total direct labor hours during the period. Determine the amount of underapplied or overapplied manufacturing overhead for the period.

Answer 2

Question

Chapter 6, Problem 6.8AP

(a)

(1)

To determine

Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

(2)

To determine

(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

(3)

To determine

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

(b)

To determine

Compare results calculated under all cost-flow methods.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.8AP

(a)

(1)

To determine

Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

(2)

To determine

(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

(3)

To determine

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

(b)

To determine

Compare results calculated under all cost-flow methods.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 6, Problem 6.8AP

(a)

(1)

To determine

Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

(2)

To determine

(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

(3)

To determine

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

(b)

To determine

Compare results calculated under all cost-flow methods.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 6, Problem 6.8AP

(a)

(1)

To determine

Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

(2)

To determine

(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

(3)

To determine

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

(b)

To determine

Compare results calculated under all cost-flow methods.

Answer 6

Chapter 6, Problem 6.8AP

(a)

(1)

To determine

Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

Answer 7

Chapter 6, Problem 6.8AP

(a)

(1)

To determine

Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

FIFO method: In FIFO method, those goods are sold first which are purchased first by the business organization.

LIFO method: In LIFO method, those goods are sold first which are purchased in last by the business organization

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under LIFO

Answer 8

(2)

To determine

(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

Answer 9

(2)

To determine

(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

Answer 10

(3)

To determine

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

Answer 11

(3)

To determine

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

Answer 12

(b)

To determine

Compare results calculated under all cost-flow methods.

Answer 13

(b)

To determine

Compare results calculated under all cost-flow methods.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 6 - Prob. 1Q Ch. 6 - Prob. 2Q Ch. 6 - Prob. 3Q Ch. 6 - Prob. 4Q Ch. 6 - Prob. 5Q Ch. 6 - 6. Explain the difference between the terms FOB...Ch. 6 - Prob. 7Q Ch. 6 - Prob. 8Q Ch. 6 - 9. “The selection of an inventory cost flow method...Ch. 6 - Prob. 10Q

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(a) The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under FIFO

The cost of (i) goods sold, (ii) ending inventory, and (iii) gross profit under moving-average cost

Compare results calculated under all cost-flow methods.

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