Chapter 18: Inventory and Overhead

Chapter 18: Inventory and Overhead

1. Specific Identification Method

   • Step 1: calculate cost of merchandise avalibe for sale
   • Step 2: Calculate cost of the ending inventory
   • Step 3: calculate cost of goods sold (step 1-step2)

2. Weighted-Average Method

   • Step 1: Calculate the average unit cost
   • Step 2: Calculate cost of the ending inventory
   • Step 3: calculate the cost of goods sold

3. First In First Out Method

   • Step 1: List units in ending inventory and their cost
   • Step 2: Calculate the cost of the ending inventory
   • Step 3: Calculate the cost of goods sold

4. Last In First Out

   • Step 1: List Units to be included in ending inventory and their cost
   • Step 2: Calculate the cost of the ending inventory
   • Step 3: Calculate the cost of goods sold