SOLUTIONS:

1. What is the cost of the inventory on April 30?

Purchase (from March 5) (4,500 units x 73.50) – 330,750

MILDRED COMPANY

2. What is the ending on August 31?

SOLUTION:
Beginning inventory – 20,000
Purchase (30,000+48,000+16,000) – 94,000
Total = 114,000
Sales (36,000+38,000) – (74,000)
Ending inventory – 40,000
Purchase – Aug 21 (24,000*38.00) – 912,000 912,000
Purchase – Aug 29 (16,000*38.60) – 617,600 617,600
Total inventory-August 31 – 1,529,600

LANE COMPANY

3. What is the cost of inventory on February 28?

SOLUTION:

UNITS UNIT COST TOTAL COST

Jan. 10 20,000 100 2,000,000
Feb. 8 30,000 110 3,300,000
50,000 5,300,000
Weight average unit cost (5,300,000/50,000) 106

Cost of inventory (5,3000,000/106) 3,180,000

METRO COMPANY

4. (moving average method) Inventory on January 31

SOLUTION:

UNITS UNIT COST TOTAL COST

Jan. 1 10,000 100 1,000,000
Jan. 7 6,000 300 1,800,000
(2,800,000/16,000) 16,000 175 2,800,000
Jan. 20 Sale (9,000) 175 (1,575,000)
7000 175 1,2225,000
Jan. 25 4,000 500 2,000,000
(3,225,000/11,000) 11,000 293 3,225,000
5. (FIFO method) Inventory on January 31
SOLUTION:

UNITS UNIT COST TOTAL COST

Jan. 1 1,000 100 100,000
Jan. 17 6,000 300 1,800,000
Jan. 25 4,000 500 2,000,000
Total FIFO cost 11,000 3,900,000