Blossom Company uses a periodic inventory system. Its records show the following for the month of April, with 25 units on hand at

April 30:

(a)







Units

Unit

Cost

Total

Cost

April 1

Inventory

33

$9

$297

12

Purchases

48

12

576

16

Purchases

14

10

140




Total

95




$1,013

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Calculate the ending inventory and cost of goods sold at April 30 using the FIFO and weighted average cost formulas. (Round the weighted average cost per unit to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e g. 5,275.)

To calculate the ending inventory and cost of goods sold (COGS) for Blossom Company at April 30 using both the FIFO (First-In, First-Out) and weighted average cost methods, we will follow the steps outlined below:

### Given Data:

- **April 1 Inventory**: 33 units @ $9 = $297
- **April 12 Purchases**: 48 units @ $12 = $576
- **April 16 Purchases**: 14 units @ $10 = $140
- **Total**: 95 units, Total Cost = $1,013

Ending inventory on hand: 25 units

### FIFO Method:

In FIFO, the first units purchased are the first units sold. The ending inventory will consist of the most recently purchased units.

**Ending Inventory:**
- 14 units from April 16 purchase @ $10 = 14 * $10 = $140
- 11 units from April 12 purchase @ $12 = 11 * $12 = $132

Total ending inventory value = $140 + $132 = $272

**COGS:**
- Units sold = Total units available for sale - Ending inventory = 95 - 25 = 70 units
- COGS = Cost of units sold

Breakdown:
- 33 units from April 1 inventory @ $9 = 33 * $9 = $297
- 37 units from April 12 purchase @ $12 = 37 * $12 = $444

Total COGS = $297 + $444 = $741

### Weighted Average Cost Method:

In the weighted average cost method, the average cost per unit is calculated and applied to both COGS and ending inventory.

**Average Cost per Unit:**
\[ \text{Average Cost per Unit} = \frac{\text{Total Cost}}{\text{Total Units}} = \frac{1013}{95} \approx 10.66 \]

**Ending Inventory:**
- Ending inventory = 25 units @ $10.66 = 25 * $10.66 ≈ $267 (rounded to 0 decimal places)

**COGS:**
- Units sold = 70
- COGS = 70 units @ $10.66 = 70 * $10.66 ≈ $746 (rounded to 0 decimal places)

### Summary:

- **FIFO Method:**
  - Ending Inventory: $272
  - COGS: $741

- **Weighted Average Cost Method:**
  - Ending Inventory: $267
  - COGS: $746

Would you like more details or have any questions?

Here are 5 questions you might want to ask:
1. How is the periodic inventory system different from the perpetual inventory system?
2. What are the implications of using FIFO versus weighted average cost on financial statements?
3. Can you explain how to calculate COGS using the LIFO method?
4. How do changes in purchase prices affect the weighted average cost method?
5. What are some advantages and disadvantages of the FIFO inventory method?

**Tip:** When using the weighted average cost method, ensure to recalculate the average cost after each purchase to maintain accuracy.

Learn how to calculate ending inventory and cost of goods sold (COGS) for Blossom Company at April 30 using FIFO and weighted average cost methods. Detailed solution includes breakdown of inventory purchases and costs. Suitable for professionals and students studying managerial accounting and inventory management.

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