Exercise on Inventory Pricing
Assume your inventory is as follows
Lot
Designation Number
In lot Remaining Date of purchase Price/item
A 90 1 Jan $85
B 75 1 Feb $83
C 85 3 Mar $87
D 100 4 April $86
E 90 1 May $86
F 100 2 June $89
Assuming all these are the items in inventory and were placed there on the dates shown:
1. What would be the price under Last in First Out (LIFO) for 25 items taken from inventory on 2 March?
2. What would be the price under First in First Out (FIFO) for 25 parts pulled on 1 May?
3. Calculate the weighted average for this part using lots A-C only
4. Assume it is 4 April. Calculate the moving average if all of lot A have been used, 50 from lot B remain, none from C have been pulled and 100 are added with lot D.