LESSON 19-2
Determining the Cost of
Merchandise Inventory

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
2

FIRST-IN, FIRST-OUT INVENTORY
COSTING METHOD

page 569

3

4

2
5
1
1.
2.
3.
4.
5.

Total units on hand
Units from the ...
LAST-IN, FIRST-OUT INVENTORY
COSTING METHOD

3
page 570

3 2

5
4
1

6

1. Total units on hand
2. Beginning inventory unit...
WEIGHTED-AVERAGE INVENTORY
COSTING METHOD

4
page 571

1. Total cost of
inventory
available
2. Weightedaverage price
per u...
CALCULATING THE COST OF
MERCHANDISE SOLD

Cost of
Merchandise
Available for
Sale
$1,020.00

5
page 572

Fifo Cost of
–
End...
COMPARISON OF INVENTORY
METHODS

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

6
page 572

LESSON 19-2
7

TERMS REVIEW

page 573

 first-in, first-out inventory costing method
 last-in, first-out inventory costing method
 ...
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Lesson 19 2

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Lesson 19 2

  1. 1. LESSON 19-2 Determining the Cost of Merchandise Inventory CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
  2. 2. 2 FIRST-IN, FIRST-OUT INVENTORY COSTING METHOD page 569 3 4 2 5 1 1. 2. 3. 4. 5. Total units on hand Units from the most recent purchase Units needed to equal the total units on hand Unit price times fifo units Total fifo cost CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 19-2
  3. 3. LAST-IN, FIRST-OUT INVENTORY COSTING METHOD 3 page 570 3 2 5 4 1 6 1. Total units on hand 2. Beginning inventory units 5. Unit price times lifo units 3. Units from the earliest purchase 6. Total lifo cost 4. Units needed to equal total units on hand CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 19-2
  4. 4. WEIGHTED-AVERAGE INVENTORY COSTING METHOD 4 page 571 1. Total cost of inventory available 2. Weightedaverage price per unit 1 3. Cost of ending inventory 2 3 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 19-2
  5. 5. CALCULATING THE COST OF MERCHANDISE SOLD Cost of Merchandise Available for Sale $1,020.00 5 page 572 Fifo Cost of – Ending Inventory = Cost of Merchandise Sold – = $634.00 $386.00 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 19-2
  6. 6. COMPARISON OF INVENTORY METHODS CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 page 572 LESSON 19-2
  7. 7. 7 TERMS REVIEW page 573  first-in, first-out inventory costing method  last-in, first-out inventory costing method  weighted-average inventory costing method CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 19-2

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