Question

Exercise 6-09 a1,a2, b (Part Level Submission) Sheffield Company reports the following for the month of June. Units Unit Cost Total Cost June 1 Inventory 210 $8 $ 1,680 12 Purchase 430 9 3,870 23 Purchase 360 10 3,600 30 Inventory 200

(a1) Your answer is correct. Calulate Weighted Average Unit Cost. (Round answer to 2 decimal places, e.g. 15.25.) Weighted Average Unit Cost $ Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION LINK TO TEXT Attempts: 1 of 3 used

(a2) Your answer is correct. Compute the cost of the ending inventory and the cost of goods sold using the average-cost method. (Round answers to 0 decimal places, e.g. 1,250.) The ending inventory $ The cost of goods sold $ Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION LINK TO TEXT Attempts: 1 of 3 used

(b) Your answer is partially correct. Try again. Will the results in (a) be higher or lower than the results under FIFO and LIFO? Ending inventory is higherlower than FIFO $ and higherlower than LIFO $ . In contrast, cost of goods sold is higherlower than FIFO $ and higherlower than LIFO $ . Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT

Answer 1

	Units (a)	Rate (b)	Amount (a*b)
Jun. 1 - Beginning Inventory	210	$8	$1,680
12 - Purchases	430	$9	$3,870
23 - Purchases	360	$10	$3,600
Total goods available	1,000		$9,150
Less: Ending inventory	200
Units sold	800
a1) Weighted-average unit cost ($9,150 / 1,000 units)	$9.15
a2)
Ending inventory under average-cost method:
Ending inventory in units (a)	200
Average-cost per unit [($8 + $9 + $10)/3]	$9
Cost of Ending Inventory under average-cost method: (a * b)	$1,800
Cost of goods sold under average-cost method:
Units sold (a)	800
Average-cost per unit [($8 + $9 + $10)/3] (b)	$9
Cost of goods sold under average-cost method (a * b)	$7,200
FIFO:	Units (a)	Rate (b)	Amount (a*b)
Jun. 1 - Beginning Inventory	210	$8	$1,680
12 - Purchases	430	$9	$3,870
23 - Purchases (800 - 210 - 430)	160	$10	$1,600
Cost of Goods Sold under FIFO	800		$7,150
23 - Purchases (360 - 160)	200	$10	$2,000
Ending inventory under FIFO	200		$2,000
LIFO:	Units (a)	Rate (b)	Amount (a*b)
23 - Purchases	360	$10	$3,600
12 - Purchases	430	$9	$3,870
Jun. 1 - Beginning Inventory (800 - 360 - 430)	10	$8	$80
Cost of Goods Sold under LIFO	800		$7,550
Jun. 1 - Beginning Inventory (210 - 10)	200	$8	$1,600
Ending inventory under LIFO	200		$1,600
Ending inventory in (a) under Average cost method ($1,800) is Lower than FIFO $2,000.
Ending inventory in (a) under Average cost method ($1,800) is Higher than LIFO $1,600.
Cost of goods sold in (a) under Average cost method ($7,200) is Higher than FIFO $7,150.
Cost of goods sold in (a) under Average cost method ($7,200) is Lower than LIFO $7,550.