Beginning Inventory 3040 units at $6, purchase 8120 units at $8, sales 9440 units at $11 what is the FIFO, LIFO, and Average Cost?

You are asked to at least attempt homework problems so we can see what you know and help you understand where you are having problems. It seems that inventory is often confusing to students, so I will show you the process for one method and maybe that will help you with the others. If you want to post your work, it can be checked.

First you have to understand the definitions of the various methods. For example, FIFO means first in first out, so the first items in are deemed to be sold first.

In your example, you started with 3040 items, added 8120, and sold 9440.

3040 items at $6 beginning
8120 items at $8 added
11160 items available
9440 items sold
1720 items ending


Using FIFO, sold items are valued at the oldest prices first and remaining items are valued at the newest prices. The cost of the units sold is 3040 (remember first items in are first sold in FIFO) at $6 and 6400 (9440 sold-3040 oldest items) at $8 = (3040 x $6) + (6400 x $8) = $69,440.

The remaining inventory is valued at 1720 at $8 or $13,760. The sales price has nothing to do with the cost of the inventory.