In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 220 units at $6 on January 1, (2) 490 units at $7 on January 8, and (3) 790 units at $8 on January 29. Assume 950 units are on hand at the end of the month. Calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost flow assumptions. Assume a periodic inventory system is used Solution Assume 950 units are on hand at the end of the month. Calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, If FIF0 is used, then the 950 units left will be the last 950 units received. Cost of Good Available = 790 units x $8 + 160 units x $7 = $7440 Cost of Goods Sold = 330 units x $7 + 220 units x $6 = $3630 (b) LIFO. Then the cost of goods sold is the last 950 units bought. Cost of Good Remaining = 240 units x $8 + 490 units x $7 + 220 unit x $6 = $6670 Cost of Good Sold = 550 units x $8 = $4400 (c) weighted average cost flow assumptions. Assume a periodic inventory system is used Weighted average cost = Total Cost / Total Unit = $11,070 / 1500 unit = $7.38 per unit Cost of Goods sold = 550 units * $7.38 = $4059 Cost of Inventory = 950 units * $7.38 = $7011 .