The explanation I can give would be the same as that of stated above:
On Aug.01, you have 400units@P10, and on Aug.12, purchases of 600units@P12.
On Aug16, you issued 500 units.
So from the concept of FIFO Method, to issue that 500units, you will use first the 400units(Aug.01)@P10. Your beginning inventory then of 400units will be used up. So to issue the remaining 100units (to complete the 500 units that has to be issued), we are going get that from the 600units@P12(Aug.12). Now you have a remaining 500 units@P12(Aug.12).
On Aug.18, you purchased 300units@15.
And then, on Aug.20, you issued 200units. To issue this,you must get it from the 500units@P12(Aug.12). And so, you have now 300units@P12(500u-200u)remaining, and another 300units@P15(Aug.18).
On Aug.25,you purchased 400units@P14. So now you have 300 units@12(Aug.12),300units@P15 (Aug.18) and 400units@P14(Aug.25).
On Aug.28,you issued 400units. To issue this, you will use the 300 units@P12(Aug.12) first. And then the remaining 100 units@P15(to complete the 400 units that has to be issued) will be issued using the 300units@15(Aug.18).
Now,you have a remaining 200 units@P15(300u-100u)(Aug.18) and 400units@P14(Aug.25) on hand.
The 200 and 400 units (a total of 600 units) will be your total units at the end of the month.
And then with its corresponding prices, a total of P8,600 will be your ending inventory.
Your Cost of Materials Issued/Used is summed up and we will get P12,700.
And there you have it! Perpetual FIFO Method.
See, we were able to compute for the same values of ending inventory, cost of materials issued/used, and total units at the end of the month..
Did I help you somehow?? ♥
0 comments:
Post a Comment