Question

July 1 beginning inventory 51 $ 10 july 13 purchase 255 12 july 25 sold ( 100 ) $ 16 july 31 ending inventory 206 calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under (a) fifo, (b) lifo, and (c) weighted average cost. assume a periodic inventory system is used. (round "cost per unit" to 2 decimal places and your final answers to nearest whole dollar amount.)

Answer 1

In Manufacturing, Inventory is typically understood as (1) the components used to build the finished product and (2) the finished product themselves. Inventory has the unique property of “cash sitting in product” – in other words, inventory does nothing for the business until it is sold in exchange for a more liquid asset, such as cash. Until then, inventory is a cost.