Solve the problem.
-Over a year period, a hardware store made the following purchases of hammers: 24 hammers at $6.89, 30 hammers at $6.08, 36 hammers at $4.69, and 26 hammers at $8.05. Inventory at the end of the year shows 35 hammers remain. Find the inventory value by (a) weighted average method, (b) FIFO Method, and (c) LIFO Method. Round final answers to the nearest cent
A)(a)$188.48
(b)$241.15
(c)$219.10
B)(a)$224.96 (b)$232.24
(c)$281.75
C)(a)$219.10 (b)$232.24
(c)$251.51
D)(a)$219.10 (b)$251.51
(c)$232.24

Question

Quizplus · Accepted Answer

To find the inventory value using different methods, we first calculate the total cost and number of hammers purchased, then apply each method:Total hammers purchased = 24 + 30 + 36 + 26 = 116 hammersTotal hammers sold = 116 - 35 = 81 hammers(a) Weighted Average Method:Total cost = (24*$6.89) + (30*$6.08) + (36*$4.69) + (26*$8.05) = $165.36 + $182.40 + $168.84 + $209.30 = $725.90Average cost per hammer = $725.90 / 116 = $6.26 (rounded to two decimal places)Inventory value = 35 hammers * $6.26 = $219.10(b) FIFO (First In, First Out) Method:Sell the hammers in the order they were purchased. The last 35 hammers would be from the last purchases:- All 26 hammers at $8.05- 9 hammers from the 36 at $4.69Inventory value = (26*$8.05) + (9*$4.69) = $209.30 + $42.21 = $251.51(c) LIFO (Last In, First Out) Method:Sell the hammers in reverse order of purchase. The remaining 35 hammers would be from the first and second purchases:- All 24 hammers at $6.89- 11 hammers from the 30 at $6.08Inventory value = (24*$6.89) + (11*$6.08) = $165.36 + $66.88 = $232.24Therefore, the correct answer is (a) $219.10, (b) $251.51, (c) $232.24.

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