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

Fixed costs, Fixed Costs Are costs such do not change along with of th...

Fixed Costs Are costs such do not change along with of the level of output? It is also named as autonomous cost, as it stays the similar irrespective of the activity level as

Example of job order costing, Example of Job Order Costing The giv...

Example of Job Order Costing The given transactions were made by a company in the month of December. Direct Materials a) 8,000/- was bought on credit, out of these

Factors affect decision making, Factors affect Decision Making These d...

Factors affect Decision Making These decisions need consideration of factors as like A. The level of market possible to be available in future B. The strategy that compe

Determine opportunity costs, Determine Opportunity Costs A company has...

Determine Opportunity Costs A company has material B in stock that originally cost Shs. 5000 for the 1000 Kshs in stores. The material is missing over from an old purchase ord

Calculate the gross profit percentage, At the end of Ehlinger Department St...

At the end of Ehlinger Department Store's fiscal year on December 31, 2012, these accounts appeared in its adjusted trial balance: Freight-In $ 7,200

Features of effective cost center framework, Features of Effective Cost Cen...

Features of Effective Cost Center Framework During the establishing cost centers, an organization must consider the given points as: a) Clear definition about the cost cent

What are the advantages and disadvantages of free float, Q. What are the ad...

Q. What are the advantages and disadvantages of free float? Advantages: It is one of the most suitable ER regimes for transitional countries that experience external shocks l

Determine growth rate, (a)  The value of a share of Rio National Equity on...

(a)  The value of a share of Rio National Equity on 31 December 2002, using the Gordon growth model and the capital asset pricing model, can be determined as follows. Required

#title.materials costing and accounting., material ledger card.following t...

material ledger card.following transactions affecting material No115-8 occurred during march 1992. march 1 balanced on hand 500 [email protected] per gallon maech 2 received 1200 gall

Break-even chart, Break-Even Chart This is a diagrammatic presentation...

Break-Even Chart This is a diagrammatic presentation of the relationship among costs, prices, expenses and the sales volume. A break-even chart expresses revenue and expens

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