Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit. During the year, purchases were: Feb. 20 300 @ $9 Aug. 12 600 @ $11 May 5 500 @ $10 Dec. 8 200 @ $12 Milo...

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Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit. During the year, purchases were:

Feb. 20	300	@	$9	Aug. 12	600	@	$11
May 5	500	@	$10	Dec. 8	200	@	$12

Milo Company uses a periodic inventory system. Sales totaled 1,500 units.

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Determine the cost of goods available for sale.

The cost of goods available for sale

19,000

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Calculate the weighted-average unit cost.

(Round answer to 2 decimal places, e.g. $2.25.)

Weighted-average unit cost

9.95

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Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost).

(Round answers to 0 decimal places, e.g. $2,120.)

FIFO	LIFO	AVERAGE-COST
The ending inventory	$9,000	$3,800	$
The cost of goods sold	$13,100	$15,200	$

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Which cost flow method results in (1) the lowest inventory amount for the balance sheet, and (2) the lowest cost of goods sold for the income statement?

(1)	FIFOLIFOEQAT_1369730975900_0_19577614165856134_017_resp_2 results in the lowest inventory amount for the balance sheet, $.
(2)	FIFOLIFOEQAT_1369730975900_0_19577614165856134_022_resp_1 results in the lowest cost of goods sold, $.

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Answered Same DayDec 24, 2021

Answer To: Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit....

Robert answered on Dec 24 2021

129 Votes

a) Computation of Cost of Goods available for Sale

Particulars

Units Rate Total Cost
Opening Inventory

400 $8 $3,200
Purchase on 20-Feb

300 $9 $2,700
Purchase on 05-May

500 $10 $5,000
Purchase on 12-Aug

600 $11 $6,600
Purchase on 08-Dec

200 $12 $2,400
Cost of goods available for sale 2000

$19,900
b) Computation of weighted-average unit cost

Average Unit Cost = Cost of Goods available for sale / Total Units
= 19,900 / 2,000

= $9.95

c) Computation of ending inventory and cost of goods sold

Under FIFO Method

Units (a) Unit Cost (b) Total (a*b)
Sale from...

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Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit. During the year, purchases were: Feb. 20 300 @ $9 Aug. 12 600 @ $11 May 5 500 @ $10 Dec. 8 200 @ $12 Milo...

Answer To: Milo Company had a beginning inventory of 400 units of Product Kimbo at a cost of $8 per unit....

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