Financial Accounting Quiz: Fifo Lifo And Weighted Average
3 questions · exam conditions
0:00
Fifo Lifo And Weighted AverageQuestion 1 of 3

Phoenix Industries reported the following inventory data:

January 1: Beginning inventory 400 units at $25 each January 10: Purchase 600 units at $28 each January 20: Sale of 700 units January 25: Purchase 300 units at $30 each January 30: Sale of 200 units

Using the weighted average method under a perpetual inventory system, what is the cost of goods sold for the January 30 sale?

$5,280 because the weighted average cost per unit after January 25 is $26.40
$5,400 because the weighted average cost per unit after January 25 is $27.00
$5,520 because the weighted average cost per unit after January 25 is $27.60
$5,600 because the weighted average cost per unit after January 25 is $28.00
← Back to quizzes

Financial Accounting Quiz

Financial Accounting Quiz: Fifo Lifo And Weighted Average

Practice Fifo Lifo And Weighted Average in Financial Accounting with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Fifo Lifo And Weighted Average, giving you a quick way to practice the rules, question types, and explanations that matter most for Financial Accounting.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Phoenix Industries reported the following inventory data:

January 1: Beginning inventory 400 units at $25 each January 10: Purchase 600 units at $28 each January 20: Sale of 700 units January 25: Purchase 300 units at $30 each January 30: Sale of 200 units

Using the weighted average method under a perpetual inventory system, what is the cost of goods sold for the January 30 sale?

  1. $5,280 because the weighted average cost per unit after January 25 is $26.40
  2. $5,400 because the weighted average cost per unit after January 25 is $27.00
  3. $5,520 because the weighted average cost per unit after January 25 is $27.60 (correct answer)
  4. $5,600 because the weighted average cost per unit after January 25 is $28.00
Explanation: Under perpetual weighted average, we recalculate the average after each purchase. After January 10: (400×25+600×25 + 600×28) ÷ 1,000 = $26.80 per unit. After January 20 sale: 300 units remain at 26.80each.AfterJanuary25purchase:(300×26.80 each. After January 25 purchase: (300×26.80 + 300×30.00)÷600=(30.00) ÷ 600 = (8,040 + $9,000) ÷ 600 = 27.60perunit.January30COGS=200×27.60 per unit. January 30 COGS = 200×27.60 = $5,520. Choice A incorrectly uses $26.40. Choice B incorrectly uses $27.00. Choice D incorrectly uses $28.00.

Question 2

Thunder Electronics uses perpetual FIFO and had the following activity in March for Model ZX-100:

March 1: Beginning inventory 150 units at $40 each March 10: Sold 100 units March 15: Purchased 200 units at $45 each
March 20: Sold 180 units March 25: Purchased 120 units at $48 each March 30: Sold 90 units

What is the cost of ending inventory on March 31?

  1. $4,800 representing the most recent costs under the FIFO method (correct answer)
  2. $4,680 representing the most recent costs under the FIFO method
  3. $4,560 representing the most recent costs under the FIFO method
  4. $4,320 representing the most recent costs under the FIFO method
Explanation: Under perpetual FIFO, we track inventory after each transaction. March 10 sale: 100 units from beginning inventory, leaving 50 at $40. March 15: Add 200 at $45. March 20 sale: 50 at $40 + 130 at $45, leaving 70 at $45. March 25: Add 120 at $48. March 30 sale: 90 units (70 at $45 + 20 at $48), leaving 100 units at 48.Endinginventory=100×48. Ending inventory = 100×48 = 4,800.ChoiceB(4,800. Choice B (4,680) might reflect 90×48+calculationerror.ChoiceC(48 + calculation error. Choice C (4,560) might reflect 95×48.ChoiceD(48. Choice D (4,320) might reflect 90×$48.

Question 3

Alpine Industries uses FIFO and reported cost of goods sold of $180,000 for the year. Inventory costs have been rising steadily throughout the year. If Alpine had used LIFO instead, their cost of goods sold would have been $195,000. What would Alpine's cost of goods sold have been under the weighted average method?

  1. $185,500 because weighted average typically falls between FIFO and LIFO results
  2. $187,500 because weighted average typically falls between FIFO and LIFO results (correct answer)
  3. $189,000 because weighted average typically falls between FIFO and LIFO results
  4. $192,500 because weighted average typically falls between FIFO and LIFO results
Explanation: When inventory costs are rising, FIFO gives the lowest COGS (uses older, cheaper costs first), LIFO gives the highest COGS (uses newer, more expensive costs first), and weighted average falls between them. The weighted average method typically produces results approximately halfway between FIFO and LIFO. COGS under weighted average ≈ ($180,000 + $195,000) ÷ 2 = 187,500.ChoiceA(187,500. Choice A (185,500) is too close to FIFO. Choice C (189,000)andD(189,000) and D (192,500) are too close to LIFO.