1.
Materials costing methods: The Meltzer company made the following mater the following materials purchases and issues during January
Inventory: January 1 500 units@$1.20
Receipts:
Issues:
January 6
10
25
January 15
27
200
400
500
560
500
@ 1.25
@ 1.30
@ 1.40
@
@
Required:
The cost of materials consumed and the cost assigned to the inventory at the end of the month
Using a perpetual inventory system and:
1.
Average costing rounding unit costs to the nearest cent
2.
Fifo costing
3.
Lifo costing
2.
Materials costing methods: The following information is to be used in costing inventory on October
31:
October 1 Beginning balance 800 units @$6
5 Purchased 200 units @$7
9 Purchased 200 units @$8
16 Issued 400 units
24 Purchased 300 units @$9
27 Issued 500 units
Required:
The cost of materials used and the cost assigned to the October 31 inventory by each of these perpetual inventory costing methods:
1.
First-in, first-out
2.
Last-in,first-out
3.
Average, using a materials ledger card and rounding unit costs to the nearest cent
4.
Most recent purchase price
3.
Materials costing methodsThe Kentucky Respiratory clinic makes the following purchases and issues of replaceable tubes for portable respirator machines:
Inventory:
Receipts:
January 1
January 6
400 units@$1.40
500 @ 1.31
Issues:
10
25
January 15
200
700
600
@ 1.24
@ 1.23
@
27 500 @
Required:
The cost of tubes issued and the cost assigned to the January 31 inventory by each of these perpetual inventory costing methods:
4.
Ledger accounts for materials cost flow: During one week of operations, a materials ledger card reflected the following transactions:
1 st day Beginning balance: 1,400 pounds@4.60
per Ib
2 nd day Received 1,000 pounds @$4.80 per Ib
3 rd day
4 th day
Issued 800 pounds
Issued 800 pounds

5 th day
6 th day
Received 1,200 pounds @$5.00 per Ib
Issued 800 pounds
Other costs for the week were direct labor, $4,800 and factory overhead $4,800 and factory overhead, $4,360; 1,700 units of product were completed, and 1,500 were sold There was no beginning inventory of finished goods, and no work was in process over the weekend
Required:
1.
Ledger accounts for materials, work in process, finished goods, and cost of goods sold, using (a) fifo costing and (Ib) lifo costing A perpetual inventory system is used (Round off unit costs to three decimal places)
5.
Ledger cards for materials: Records of the summit company show the following purchases and issues of materials during October
October 1 Beginning balance 2,800 units @$12.00 per unit
4 Issued 1,200 units
6 Received 1,000 units @$13.30 per unit
8 Issued 1,000 units
14 Received 400 units @$14.00 per unit
17 Issued 800 units
20 Received 500 units@$14.16
per unit
25 Issued 900 units
27 Received 1,200 units @$13.00 per unit
Required:
1.
Materials ledger cards using; (a) fifo costing;(b) lifo costing ;(c)average costing
2.
Cost of materials issued during October for the three methods
3.
The October 31 inventory if the market price of the materials on that date is $11 per unit
6.
Inventory costing and valuation: Alberta, Ltd., uses perpetual inventory costing for inventory item
407 , which it purchases for reasale the company began its operations on January 1, and is in the process of preparing its first financial statements
Upon examining the inventory ledger and other accounting records, the following information was gathered pertaining to the first four months of operations:
Sales Purchases
Cost per
Units Unit
January 2………… 2,000 $5
February 2………. 1,200 6
March 2…………. 1,500 8
April 2…………… 1,900 7
Units
January 15………………… 500
January 31………………… 700
February 15………………. 600
February 28……………… 900
On April 30, the following additional information was obtained: a.
Current replacement cost,$6.50 per unit
March 15…………………. 600
March 31…………………. 800
April 15……………………. 700
April 30……………………. 700 b.
Net realizable value,$8 per unit c.
Net realizable value reduced by a normal profit margin, $5 per unit
Management has not decided which of the following three inventory costing methods should be selected to evaluate the cost of goods sold;

a.
Average method b.
First-in, first-out method c.
Last-in, first-out method
Required:
1.
The perpetual inventory ledger for item 407 using each of the above methods (Carry all computations to three decimal places)
A comparative statement showing the effect of each method on gross profit; the sales price is $10 per unit
7.
Inventory valuation at cost or market, whichever is lower-applied to groups: Weinhaller, Inc., has divided its products into two basic groups with two grades within each group The lower of cost or market rule has always been applied to the ending inventory of each group of products The following schedule presents the relevant inventory data as of December 31
Grade 1
Group A
Grade 2 Grade 3
Group B
Grade 4
Number of units on hand…………………... 50
Sales price per unit……………………………… $30
100
$40
100
$35
200
$20
Sales price less cost of completion
And disposal per unit…………………………. 24
Sales price less cost of completion
And disposal and normal profit per unit…………………………………………....... 18
Replacement cost per unit at
December 31……………………………………… 20
36
28
25
30
23
26
16
12
17
Cost per unit………………………………………. 19
Required:
29 27 15
The value of inventory as of December 31 by applying the lower of cost or market rule to each group of products
8.
Inventory valuation at other than cost: In some instance accounting principles requires a departure from valuing inventory exclusively at cost
Required:
1.
The proper inventory price per unit for these cases:
1
Cost……………………………………………………………… $2.00
Net realizable value*…………………………………… 1.30
Case
2 3 4 5
$2.00 $2.00 $2.00 $2.00
2.05 1.80 2.40 1.90
Net realizable value less normal profit**……..
Market (replacement cost)………………………….
2.
The proper inventory price per unit in case 5, assuming that the item is also in stock at the end of the next fiscal period and that the four values are $2.00, $1.90, $1.70, and $2.05, respectively
1.10
1.20
1.85 1.60 2.20 1.70
2.10 1.85 2.15 1.60