Beginning Inventory, Purchases, and Sales Data for Hammers Are as Follows

question 32

Essay

Beginning inventory, purchases, and sales data for hammers are as follows:? $$\begin{array} { | l | c | l | l | } \hline & \text { Mar. } 3 & \text { Inventory } & 12 \text { units at } \$ 15 \\\hline & 11 & \text { Purchase } & 13 \text { units at } \$ 17 \\\hline & 14 & \text { Sale } & 18 \text { units } \\\hline & 21 & \text { Purchase } & 9 \text { units at } \$ 20 \\\hline & 25 & \text { Sale } & 10 \text { units } \\\hline\end{array}$$ Assuming the business maintains a perpetual inventory system, complete the inventory cards and calculate the cost of merchandise sold and ending inventory under the following assumptions:
(a) First-in, first-out? $\begin{array}{|l|l|l|l|}\hline ~\quad\quad\quad\quad&\quad~\quad\quad\quad\text { Purchases }\quad\quad\quad & \begin{array}{c}\quad\quad~~\quad\text { Cost of } \quad\quad\quad\quad\\\text { Merchandise Sold }\end{array} & \quad\quad\quad\quad\quad\text { Inventory }\quad\quad~ \\\end{array}$
$\begin{array}{|c|c|c|c|c|c|c|c|c|c|}\hline \text { Date } & \text { Qty. } & \begin{array}{c}\text { Unit } \\\text { Cost }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} & \text { Qty. } & \begin{array}{c}\text { Unit } \\\text { Cost }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} & \text { Qty. } & \begin{array}{c}\text { Unit } \\\text { Cost }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} \\\hline \text { Mar. 3 } & & & & & & & & & \\\hline 11 & & & & & & & & & \\\hline 14 & & & & & & & & & \\\hline 21 & & & & & & & & & \\\hline 25 & & & & & & & & & \\\hline \text { Balances } & & & & & & & & & \\\hline\end{array}$ (b) Last-in, first-out $\begin{array}{|l|l|l|l|}\hline ~\quad\quad\quad\quad&\quad~\quad\quad\quad\text { Purchases }\quad\quad\quad & \begin{array}{c}\quad\quad~~\quad\text { Cost of } \quad\quad\quad\quad\\\text { Merchandise Sold }\end{array} & \quad\quad\quad\quad\quad\text { Inventory }\quad\quad~ \\\end{array}$
$\begin{array}{|c|c|c|c|c|c|c|c|c|c|}\hline \text { Date } & \text { Qty. } & \begin{array}{c}\text { Unit } \\\text { Cost }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} & \text { Qty. } & \begin{array}{c}\text { Unit } \\\text { Cost }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} & \text { Qty. } & \begin{array}{c}\text { Unit } \\\text { Cost }\end{array} & \begin{array}{c}\text { Total } \\\text { Cost }\end{array} \\\hline \text { Mar. 3 } & & & & & & & & & \\\hline 11 & & & & & & & & & \\\hline 14 & & & & & & & & & \\\hline 21 & & & & & & & & & \\\hline 25 & & & & & & & & & \\\hline \text { Balances } & & & & & & & & & \\\hline\end{array}$

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Definitions:

Actual Materials Purchased

The total quantity and cost of raw materials bought by a company for production during a specific period.

Standard Price

A predetermined cost assigned to materials, labor, and overhead for budgeting and cost-control purposes.

Actual Cost

The true financial expenditure required to produce a product or service, as opposed to budgeted or standard costs.

Labour Rate Variance

The difference between the actual cost of direct labor and the standard cost of direct labor multiplied by the actual hours worked.