Shawn Company had 100 units in beginning inventory at a total cost of $10,000. The company purchased 200 units at a total cost of $26,000. At the end of the year, Shawn had 75 units in ending inventory. Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost.

see below

Explanation:

The ending inventory is  75 units.

The cost of per unit of beginning inventory is $10,000/100 = $100

the cost per unit of purchases is $26,000 / 200 = $130

1) FIFO

First in, first out. under FIFO, the company would first sell the 100 units in stock, meaning the balance of 75 would be from the batch of 200 units

Cost of the ending inventory

= $75 x 130

=$9,750

The cost of costs sold will be

100 units from beg. inventory  =100 x 100

125 units from the batch of 200 = 125 x 130

=(100 x 100) + (125 x130)

=10,000 +16, 250

=$26, 250

(2) LIFO

last in , last out,  units from the beginning inventory will be sold last

cost of the ending inventory

= 75 units  x $100

= $7, 500

cost of goods sold

= ($200 x 130 ) +  (25 x 100)

=$26,000 + $ 2,500

=$28,500

3) average-cost method

Average cost of inventory will be

100 x100 = $10,000

200 x 130 = $ 26,000

total units = 300 units costing $36,000( 10,000 + 26,000)

Average cost = $36,000/ 300

=$120

cost of the ending inventory

= 80 units x  $120

= $9,600

cost of goods sold

= opening stock+ purchases - closing stock

=100 +200-75

225 units at $120

cost = 225 X 120

=$27,000

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