Question

attached with previous question

What is the ending inventory on Mar 31st under the FIFO inventory costing? Answer What is the Cost of Goods Sold for the Mar 17th sale under MWA inventory costing? Answer 24 What is the Cost of Goods Sold for the Mar 31st sale under MWA inventory costing? Answer:

Answer 1

Before solving the question we must know about FIFO (First in First Out) and Moving Weighted Average (MWA) inventory costing methods.

FIFO Method - in this method of pricing the issue of material, in the order in which they are purchased.

MWA Method - under this method, the issue rate is calculated by dividing the total of the periodic weighted average price of a given number of perods by the number of periods.

CALCULATIONS USING FIFO METHOD

DATE

RECEIPTS

ISSUE

BALANCE

	Quantity	Rate	Amount	quantity	rate	amount	quantity	rate	amount
1 - March	-	-	-	-	-	-	5	30	150
3 - March	-	-	-	3	30	90	2	30	60
6 - March	30	40	1200	-	-	-	2	30	60
							30	40	1200
17 - March	-	-	-	2	30	60	12	40	480
				18	40	720
23 - March	50	25	1250	-	-	-	12	40	480
				-	-	-	50	25	1250
31 - March	-	-	-	12	40	480	32	25	800
				18	25	450

CALCULATIUONS USING MWA METHOD

DATE

RECEIPTS

ISSUE

BALANCE

	QUANTITY	RATE	AMOUNT	QUANTITY	RATE	AMOUNT	QUANTITY	RATE	AMOUNT
1 - MARCH	-	-	-	-	-	-	5	30	150
3 - March	-	-	-	3	30	90	2	30	60
6 - March	30	40	1200	-	-	-	32	39.38	1260
17 - March	-	-	-	2	39.38	78.76	30	39.38	1181.24
23 - March	50	25	1250	-	-	-	80	30.39	2431.25
31 - March	-	-	-	12	30.39	364.68	68	30.39	2066.57

Cost of Goods Sold on march 3 as per FIFO Inventory Costing = $90

Cost of Goods Sold on march 17 as per FIFO Inventory Costing = $780 ($60 + $720)

Ending Inventory on march 31 as per FIFO Inventory Costing = $930 ($480 + $450)

Cost of Goods Sold on march 17 as per MWA Inventory Costing = $78.76

Cost of Goods Sold on march 31 as per MWA Inventory Costing = $364.68