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

Assignment Help:

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


Related Discussions:- Example of lifo, fifo and weighted average method

Total landed cost, How many pounds of guava puree are required? a. In a ...

How many pounds of guava puree are required? a. In a month? b. How many in a year? In computing the Total Landed cost for mango concentrate, we are interested in the incre

Changes in product mix, Changes in Product Mix A change in product mix...

Changes in Product Mix A change in product mix in which individual products have different contribution will contain different contribution. Sales ratio will conclude in a cha

Business process mapping, Using some variation of business process mapping,...

Using some variation of business process mapping, graph out the mango concentrate supply chain focusing on when cost is added to the supply chain. (i.e. Display/draw the process

Calculate manufacturing overhead for the year, Baka Corporation applies man...

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on t

Determine equivalent units of the product, Determine Equivalent Units of th...

Determine Equivalent Units of the Product Let assume there are 4,000 units of a product in ending inventory out of that 60 percent are fully complete whereas the remaining are

Marginal cost curves, A firm operates two plants with the marginal cost cur...

A firm operates two plants with the marginal cost curves given by MC 1 = 50 + 2Q 1 , MC 2 = 90 + Q 2 . If the firm's total output must be 80 units, how much will it produce a

Exercise I do not understand, what would your answer be to the following pr...

what would your answer be to the following problem, please show detailed calculations: The XYZ Company manufacturers Part 123 for use in its production line. The manufacturering co

Draw the demand curve of marginal benefit, The total demand (marginal benef...

The total demand (marginal benefit) curve for visiting Yosemite is as follows: Price = 5000-10*NumberOfTrips -10*TonsOfVisibleTrash. a. Suppose the quantity of trash=100 tons. D

Cost accounting, using relevant examples discuss the meaning and scope of c...

using relevant examples discuss the meaning and scope of cost accounting

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd