Exercise 1) Evaluation of Inventory:
A company has collected the following data from the purchase and use of heating fuel from its Business Statistics department for inventory management of the previous year:
Date Amount purchased (liters) Purchase Price (EUR/liter)
12.1.2006 15000 0,80
14.2,2006 20000 0,75
25.3.2006 6000 0,81
28.6.2006 18000 0,90
29.8.2006 33000 0,76
Date Amount used/consumed (liters)
30.9.2006 7000
31.10,2006 23000
30.11.2006 9000
31.12.2006 11000
a) Calculate the cost/use of material sold for the material(energy):
Based on the following evaluation methods:
- FIFO
- HIFO
- LIFO
- average price
b) Book the transaction for the consumption of the fuel at the 31.12.2006 (1.1.-31.12.2006) correctly by using the FIFO-method and indicate the effect on the profit! (All the purchases of the fuel have been recorded yet!)