Inventory Costing Methods Practice Questions

The following information is available for Massey Company:

Assume that Massey uses a periodic inventory system and that there are 5,250 units left at the end of the month. Total sales amounted to $225,000

Instructions:

Compute the cost of ending inventory and cost of goods sold under the

(a) FIFO method.

(b) Average-cost method.

Wang Company reports the following for the month of June. Total sales amounted of $6,750,000.

Instructions

(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO.

(b) Compute the cost of the ending inventory and the cost of goods sold using the average-cost method.

1. A company just starting business made the following four inventory purchases in June:

A physical count of merchandise inventory on June 30 reveals that there are 750 units on hand.

1. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

2. Using the average-cost method, the amount allocated to the ending inventory on June 30 is 

The following information was available from the inventory records of Queen Company for July:

• What is Queen’s cost of goods sold using average cost? (round per unit amounts to two decimal places)

• What should be the inventory reported on Queen’s July 31 statement of financial position using the average-cost inventory method (round per unit amounts to two decimal places)?

• What should be the inventory reported on Queen’s July 31 statement of financial position using the FIFO inventory method?