On July 1, the Lavaca Company Began Business with the Purchase

question 8

Essay

On July 1, the Lavaca Company began business with the purchase of 250 units of inventory for $21, 625.During the month, Lavaca had the following inventory transactions:
$\begin{array}{ll}\text { Date }\\\text { July } 6 & \text { Purchased } 100 \text { units @ } \$ 75 \text { per unit. } \\11 & \text { Sold } 200 \text { units. } \\17 & \text { Sold 85 urits. } \\24 & \text { Purchased } 100 \text { units } @ \$ 125 \text { per unit } \\28 & \text { Purchased } 50 \text { units } @ \$ 110 \text { per unit. } \\30 & \text { Sold } 100 \text { unite }\end{array}$ Required:
Compute the cost of the inventory at the end of July under the following alternatives:
a. $\quad$ FlFO periodic
b. $\quad$ FIFO perpetual
c. $\quad$ LIFO periodic
d. $\quad$ LIFO perpetual
e. $\quad$ Weighted average (round unit costs to 2 decimal placess
f. $\quad$ Moving average (round unit costs to 2 decimal places)

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Definitions:

Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums, remaining constant regardless of business activity.

Marginal Costs

The expense incurred by manufacturing an extra unit of a product or service.

Fixed Costs

Expenses that do not vary with the level of output or sales, such as rent, insurance, and salaries, distinguished by their consistency.

Marginal Costs

The extra cost incurred by producing one additional unit of a product.