Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the October 9 sale consisted of 55 units from beginning inventory and 185 units from the October 5 purchase; the October 29 sale consisted of 35 units from the October 18 purchase and 75 units from the October 25 purchase. (Round your average cost per unit to 2 decimal places.)

Answers

Answer 1
Answer:

Answer:

Ending inventory:

(a) specific identification = $5,885

(b) weighted average = $5,960

(c) FIFO = $5,750

(d) LIFO = $5,845

Explanation:

Date        Activity                 Units       Cost        Total

Oct. 1       Beg. inventory     155          $14          $2,170

Oct. 5      Purchase              180         $13.50     $2,430  

Oct. 9      Sales                     240

Oct. 18     Purchase              140         $13          $1,820

Oct. 29    Sales                     110

Oct. 25    Purchase              330        $12.50     $4,125

total         Purchases            805        $13.10      $10,545                              

Cost of goods sold:

(a) specific identification = [(55 x $14) + (185 x $13,50)] + [(35 x $13) + (75 x $12.50)] = $4,660

(b) weighted average = $13.10 x 350 units = $4,585

(c) FIFO = (155 x $14) + (85 x $13.50) + (95 x $13.50) + (15 x $13) = $4,795

(d) LIFO = (180 x $13.50) + (60 x $14) + (110 x $13) = $4,700

Ending inventory:

(a) specific identification = $10,545 - $4,660 = $5,885

(b) weighted average = $10,545 - $4,585 = $5,960

(c) FIFO = $10,545 - $4,795 = $5,750

(d) LIFO = $10,545 - $4,700 = $5,845


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Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs.Assume that Minneapolis’ sales by major market are:
Market
Minneapolis Medical Dental
Sales $ 330,000 100 % $ 220,000 100 % $ 110,000 100 %
Variable expenses 198,000 60 % 143,000 65 % 55,000 50 %

Contribution margin 132,000 40 % 77,000 35 % 55,000 50 %
Traceable fixed expenses 39,600 12 % 11,000 5 % 28,600 26 %

Market segment margin 92,400 28 % $ 66,000 30 % $ 26,400 24 %

Common fixed expenses
not traceable to markets 9,900 3 %

Office segment margin $ 82,500 25 %


The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $4,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $38,500 or increase sales in the Dental market by $33,000.
Required:
Calculate the increased segment margin.for Medical:
Calculate the increased segment margin for Dental:

Answers

Answer:

Increase Segment margin for Medial = $9,075  

Increase Segment margin for Dental = $12,100

Explanation:

The calculation of  increased segment margin.for Medical and Dental is shown below:-

                                 Medical                       Dental

Incremental Sales     $38,500                    $33,000

Less: Variable Cost  ($25,025)                  ($16,500)

(Medical 65% and ($38,500  × 65%)    ($33,000  × 50%)

Dental 50%)  

Incremental

Contribution Margin   $13,475                      $16,500

Less: Traceable

Advertising Cost       ($4,400)                         ($4,400)

Increase Segment

Margin                       $9,075                          $12,100

On June 10, Marin Company purchased $8,400 of merchandise from Cullumber Company, on account, terms 3/10, n/30. Marin pays the freight costs of $380 on June 11. Goods totaling $500 are returned to Cullumber for credit on June 12. On June 19, Marin Company pays Cullumber Company in full, less the purchase discount. Both companies use a perpetual inventory system.Prepare separate entries for each transaction on the books of Cullumber Company

Answers

Answer:

                                                       Debit            Credit

June 10   Accounts Receivables        $8400

               Merchandise                                        $8400

June 12    Merchandise                     $500

               Accounts Receivables                             $500

June 19    Cash                                  7663

               Discount                             237

               Accounts Receivables                            $7900

Explanation:

Final answer:

The transactions in Cullumber's books include sales revenue, accounts receivable, sales returns and allowances, and finally a cash entry alongside sales discounts when Marin pays the balance due.

Explanation:

The transactions on the books of Cullumber Company would be recorded as follows:

  1. On June 10, Marin Company purchases $8,400 worth of goods. In the books of Cullumber, this would be recorded as: Accounts Receivable - Marin Company $8,400andSales Revenue $8,400
  2. On June 11, Marin pays freight costs of $380. This has no effect on the entries in the books of Cullumber Company.
  3. On June 12, Goods totaling $500 are returned by Marin. This would be recorded as: Sales Returns and Allowances $500 and Accounts Receivable - Marin Company $500
  4. On June 19, Marin pays off the balance less the purchase discount. The payment can be recorded as: Cash $7,621, Sales Discounts $279 and Accounts Receivable – Marin Company $7,900. The sales discount is (3% of $8400-$500) = $279.

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Coburn (beginning capital, $55,000) and Webb (beginning capital $95,000) are partners. During 2017, the partnership earned net income of $71,000, and Coburn made drawings of $17,000 while Webb made drawings of $25,000. Assume the partnership income-sharing agreement calls for income to be divided 30% to Coburn and 70% to Webb. Prepare the journal entry to record the allocation of net income.

Answers

Answer:

Given that,

Beginning capital of Coburn = $55,000

Beginning capital of Webb = $95,000

Partnership earned net income = $71,000

Coburn made drawings = $17,000

Webb made drawings = $25,000

Income-sharing ratio = 30:70

Coburn's share in profits = Net income earned × 30%

                                          = $71,000 × 0.3

                                          = $21,300

Webb's share in profits = Net income earned × 30%

                                       = $71,000 × 0.7

                                       = $49,700

Therefore, the journal entry is as follows:

Profit and loss A/c  Dr. $71,000

          To Coburn's capital A/c      $21,300

           To Webb's capital A/c        $49,700

(To record the allocation of net income)

Gelb Company currently manufactures 51,500 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $78,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 51,500 units and buying 51,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier?

Answers

Answer:

$343,725; $200,850

Explanation:

(a) The total incremental cost of making 51,500 units is calculated as below:

Total Relevant Costs:

= Variable Cost Per Unit + Fixed Manufacturing Costs

= (Relevant Amount Per Unit × No. of units) + Fixed Manufacturing Costs

= ($5.15 × 51,500) + $78,500

= $265,225 + $78,500

= $343,725

Therefore, the total incremental cost of making 51,500 units is $343,725.

(b) The total incremental cost of buying 51,500 units is determined as below:

Total Relevant Costs = Purchase Price Per Unit × No. of units

                                   = $3.90 × 51,500

                                   = $200,850

Therefore, the total incremental cost of buying 51,500 units is $200,850.

(c) The company should buy the component from outside supplier as it results in a lower total incremental cost of $200,850.

TB MC Qu. 05-109 Marquis Company uses... Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales: August 2 10 units were purchased at $12 per unit. August 18 15 units were purchased at $14 per unit. August 29 12 units were sold. What is the amount of the cost of goods sold for this sale

Answers

Answer:

$158.40

Explanation:

For computation of amount of the cost of goods sold for this sale first we need to find out the Weighted Average Cost per unit which is shown below:-

Weighted Average Cost per unit = ((10 units × $12) + (15 units × $14)] ÷ (10 + 15)

= 330 ÷ $25

= $ 13.20 per unit

Cost of Goods Sold = Purchase per unit × Weighted Average Cost per unit

= 12 units × 13.20 per unit

= $158.40

You learn that the Volonian government has canceled the trade licenses of several firms in the e-learning market in the past due to censorship issues. In this situation, what measures are most likely to help Gerlach Publishing acquire a trade license?

Answers

Answer:

The measures is to get the Government in developing and shaping of contents of the e-learning software.

Explanation:

By getting the Government agent(s) or authority in the development and shaping of contents of the software, you are not only creating harmony with the local government but also ensuring that the agent helps scrutinizing the content of the software and also ensuring that the software does not contain any content that is objectionable to the government and this measure will definitely help Gerlach Publishing acquire a trade license.

Final answer:

To acquire a trade license in Volonia, Gerlach Publishing should adhere to local regulations, ensure their content respects societal norms, engage local legal consultants, and maintain open communication with authorities.

Explanation:

In light of the Volonian government's previous cancellation of trade licenses in the e-learning market due to censorship issues, the approach Gerlach Publishing should take needs to focus on compliance and transparency. This includes strict adherence to local regulation laws and ensuring non-violation of any censorship rules.

Depicting strong commitment towards promoting free and respectful dialogue in their e-learning materials could be beneficial. This can be achieved by implementing robust internal review processes to ensure all content is suitable and respects the norms and values of Volonian society.

Engaging local legal consultants to understand the nuances of Volonian law can also aid in the process. Lastly, establishing and maintaining open communication with the authorities demonstrating their dedication to lawful practices could be advantageous.

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