Task 2.

Using the average costing LIFO and FIFO method

compute the cost?

Cost of closing inventory by FIFO method:

Purchase date: Qty Unit cost Total cost

Nov. 9 6 80 4,800

Dec. 1 4 8.5 3,400

Total sales on dec12 are 8 so all the units will be sold on nov.9 and

Two units will be sold on Dec. 1.

Closing inventory=2x8.5=17

Cost of closing inventory by LIFO method:

Purchase date: Qty Unit cost Total cost

Nov. 9 6 80 4,800

Dec. 1 4 8.5 3,400

Total sales on dec12 are 8 so all the units will be sold on dec.1 and

Four units will be sold on Nov. 9.

Closing inventory=2x80=160

Cost of closing inventory by AVCO method:

Purchase date: Qty Unit cost Total cost

Nov. 9 6 80 4,800

Dec. 1 4 8.5 3,400

Total 10 8,200
Closing inventory=10-8=2

8,200/10=820

Cost of closing inventory=820x2=1640