Only three canoes are offered, the Iroquois, Chippewa, and Winnebago, which cost $1,100,$1,400, and $2,100, respectively. Each canoe also comes as a kit and costs $450, $550, and $800 respectively. Custom paddles are also available and cost $45 and $75, for medium and large sizes. The beginning on April 1 is as follows: Iroquois-1canoe/2 kits Chippewa-2 canoes/2 kits; Winnebago-0 canoes/3 kits; and paddles-6 medium/6 large. The ending inventory on June 30 is as follows: Iroquois-2 canoes/1 kit; Chippewa-0 canoes/1 kit; Winnebago-2 canoes/1 kit; and paddles-6 medium/4 large. The following information is a summary of inventory purchased by the retail outlet during the three months(April through June):
Date of purchase Units Item Cost per unit
April 5 3 Iroquois canoe $1,100
3 Chippewa canoe $1,400
3 Winnebago canoe $2,100
May 1 3 Iroquois kit $450
2 Chippewa kit $550
1 Winnebago kit $800
8 Paddle medium $45
6 Paddle large $75
June 2 2 Chippewa kit $550
1 Winnebago kit $800
a. Find the cost of goods sold using the specific identification inventory method.
b. Find the cost of goods sold using the weighted-average inventory method.
c. Decorah Custom Canoes had net sales of $8,085 at cost for the month of April, and the ending inventory on April 30 was $14,645. Compute the beginning inventory on April 1 (Hint: based on what is listed in the case), and then find the average inventory at cost the turnover rate at cost for April.