[jacquelinejabuen]

The following lots of a particular material were available for use during the year:
Beginning inventory 40 units @ P 80
First purchase 40 @ 82
Second purchase 60 @ 85
Third purchase 60 @ 87
Ending inventory 50

The company uses periodic inventory system

Required:
1.compute the cost assigned to ending inventory, assuming FIFO as the costing method
2. compute the cost assigned to ending inventory, assuming the average (moving) as the closing method.

[richiem]

Hi there,

Here is the way I see it.

You have procured 200 units and utilized 150 (200-150 = ending balance)

Since you are utilizing the FIFO method you would then:

Add up all your purchase totals until you reach 150.

all of first purchase 40
all of second purchase 40
all of third purchase 60
Final Purchase 10
Total: 40+40+60+10 = 150

That means you have 50 remaining (60-10) @ 87 each

Total: 50*87= $4,350.00 Final Inventory

If you were utilizing the LIFO method you would start at the final purchase and work backwards.

[richiem]

The second half of the question:

Easiest way:

Total cost ($16,800) / # units (200) = avg. cost each unit ($84)

Take the average cost ($84) * the remaining units (50) = remaining inventory ($4,200.00)