Example of lifo, fifo and weighted average method, Cost Accounting

Example of LIFO, FIFO and Weighted Average Method

Suppose the following purchases were made in ABC Ltd as like:

Date of purchase     Units purchased              Price/unit

1st January                   500                              100

2nd January                  600                              200

3rd January                   800                              400

Units used on date 4th January are 900. Find out the cost/value of units employed by using of FIFO, LIFO and weighted average.

Required: 

Find out the cost of units employed and the value of the closing stocks by utilizing LIFO and Weighted Average and FIFO.

Solution

1. FIFO

 

Cost of units used

 Date   

Units   

Unit price

Total cost

Jan 1

500     

100

 50,000

Jan 2

400

200

 80,000

 

900

Cost of units used

130,000

Closing stock is valued like:

 

Cost of units used

Date   

Units   

Unit price

Total cost

Jan 1

500     

100

 50,000

Jan 2

400

200

 80,000

 

900

Cost of units used

130,000

2. LIFO

 

Cost of units used

Date   

Units   

Unit price

Total cost

Jan 3

800     

400

 320,000

Jan 2

100

200

   20,000

 

900

Cost of units used

 340,000

                           Closing stock is valued as

Date   

Units   

Unit price

Total cost

Jan 2

   500  

200

 100,000

Jan 1

   500

100

   50,000

 

1,000

Value of closing stocks

 150,000

3. Weighted average

Date                Units                Unit price                    Total Cost of                Issues

0 - 0                900                  257.8                           232,105.20

Closing Stock Valuation = (Goods Available - Goods Issued) x Unit Price =

Unit Price = [500(100) + 600 (200) + 800 (400)]/1,900

=490,000/1,900

= 257.8

Posted Date: 2/5/2013 5:34:35 AM | Location : United States







Related Discussions:- Example of lifo, fifo and weighted average method, Assignment Help, Ask Question on Example of lifo, fifo and weighted average method, Get Answer, Expert's Help, Example of lifo, fifo and weighted average method Discussions

Write discussion on Example of lifo, fifo and weighted average method
Your posts are moderated
Related Questions
1) Presented below is a list of terms, followed by definitions or descriptions of those terms. a. Cost pool b. Actual cost system c. Cost driver d. Manufacturing diver

Accounting for Job Order Costing - Direct Materials Direct materials (i) Dr Stores ledger control Account Cr Cash Account - for cash purchasers              X (ii) D

In January 2012, the management of Stefan Company concludes that it has sufficient cash to permit some short-term investments in debt and stock securities. During the year, the fol

A Market Value Schedule (in one report),for the complex. This schedule should show the market value of the complex at the end of each year of the project.  Valuation method and oth

Which method of measuring costs associated with production is more widely used in practice A. Normal Costing  B. Actual Costing  C. Both are used equally  D. Neither one

Amazing acrobatics performs acrobatics in stadiums around the world. The average show sells about 1,000 tickets at $60 per ticket. Each show requires a team of 45 highly trained sp

What are the importance of cost classification

Amy earns $35,000 working part time. Consequently, she is not eligible to participate in her employer's retirement plan or health insurance program. Amy's expenses are summarized a

Determine whether process is under control: Hall's refrigeration and heating company is concerned about complaints from their customers about some of their technicia