Periodic inventory using FIFO, LIFO, and weighted average cost methods
The units of an item available for sale during the year were as follows:
Date	Line Item Description	Units	Cost per Unit	Amount
Jan. 1	Inventory	15 units	at $49	$735
Aug. 13	Purchase	5 units	at $51	255
Nov. 30	Purchase	10 units	at $53	530
Available for sale	30 units	 	$1,520
There are 18 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using the (a) first-in, first-out (FIFO) method; (b) last-in, first-out (LIFO) method; and (c) weighted average cost method (round per-unit cost to two decimal places and your final answer to the nearest whole dollar).
Line Item Description	Amount
a. First-in, first-out (FIFO) method	$fill in the blank 1
b. Last-in, first-out (LIFO) method	$fill in the blank 2
c. Weighted average cost method

To determine the inventory cost using the three methods (FIFO, LIFO, and weighted average cost), we will follow the steps for each method separately.

### a. First-In, First-Out (FIFO) Method
In the FIFO method, the earliest goods purchased are the first to be used. We start from the beginning of the year and move forward until we account for all 18 units in the ending inventory.

1. Jan. 1 Inventory: 15 units at $49 = $735
2. Aug. 13 Purchase: 5 units at $51 = $255
3. Nov. 30 Purchase: 10 units at $53 = $530

Available for sale: 30 units

Ending inventory of 18 units:
- 15 units from Jan. 1 at $49 = 15 * $49 = $735
- 3 units from Aug. 13 at $51 = 3 * $51 = $153

\[ \text{Total FIFO inventory cost} = $735 + $153 = $888 \]

### b. Last-In, First-Out (LIFO) Method
In the LIFO method, the latest goods purchased are the first to be used. We start from the end of the year and move backward until we account for all 18 units in the ending inventory.

Ending inventory of 18 units:
- 10 units from Nov. 30 at $53 = 10 * $53 = $530
- 5 units from Aug. 13 at $51 = 5 * $51 = $255
- 3 units from Jan. 1 at $49 = 3 * $49 = $147

\[ \text{Total LIFO inventory cost} = $530 + $255 + $147 = $932 \]

### c. Weighted Average Cost Method
In the weighted average cost method, we calculate the average cost per unit and then multiply by the number of units in ending inventory.

Total cost of all units available for sale: $1,520
Total units available for sale: 30 units

\[ \text{Weighted average cost per unit} = \frac{\text{Total cost}}{\text{Total units}} = \frac{1520}{30} = 50.67 \]

Ending inventory of 18 units:
\[ \text{Total weighted average cost} = 18 \times 50.67 = 912.06 \]
Rounding to the nearest whole dollar:
\[ \text{Total weighted average cost} = 912 \]

### Summary
- a. FIFO method: $888
- b. LIFO method: $932
- c. Weighted average cost method: $912

If you have any further questions or need more details, feel free to ask!

Here are some questions you might consider asking:
1. How does each inventory valuation method affect financial statements?
2. What are the benefits and drawbacks of using FIFO?
3. What scenarios favor the use of LIFO over FIFO?
4. How do inventory valuation methods impact taxes?
5. Can you explain how inflation affects each inventory valuation method?

**Tip:** Understanding the impact of different inventory valuation methods on your financial statements can help in strategic decision-making, especially in periods of price fluctuation.

Learn how to determine inventory costs using FIFO, LIFO, and weighted average cost methods with a detailed step-by-step solution. This problem involves calculating costs based on inventory units and costs per unit, suitable for higher education students and professionals in finance and accounting.

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