Calculate Ending Inventory for Novak Corp. using FIFO, Moving Average, and LIFO Methods
What are the average costs for each unit purchased by Novak Corp. in July?
Average Cost Calculation:
July 6: $89.67
July 11: $86
July 14: $86
July 21: $92
July 27: $92
Explanation: To calculate the average cost for each unit purchased by Novak Corp. in July, we need to consider the unit cost for each purchase date. The average cost is calculated by dividing the total cost by the number of units purchased. For example, the average cost for July 1 purchases is $81 because the company purchased 9 units at $81 each.
What is the ending inventory for Novak Corp. using FIFO, Moving Average, and LIFO methods?
Ending Inventory Calculation:
Ending Inventory under Perpetual System
FIFO Method: $589
Moving Average Method: $584.34
LIFO Method: $589
Final Answer: The ending inventory for Novak Corp under a perpetual inventory system was calculated using FIFO, moving average, and LIFO methods. FIFO method yielded $589, moving average method resulted in $584.34, and LIFO method gave $589.
Explanation: In FIFO, we start with the oldest inventory, in Moving Average, we take an average after each purchase, and in LIFO, we start with the newest inventory. After considering the remaining purchase inventory after July 27 sales, the totals were calculated for each method.