Samuelson and Messenger (SAM) began 2021 with 250 units of its one product. These units were purchased near the end of 2020 for $20 each. During the month of January, 125 units were purchased on January 8 for $23 each and another 250 units were purchased on January 19 for $25 each. Sales of 200 units and 150 units were made on January 10 and January 25, respectively. There were 275 units on hand at the end of the month. SAM uses a periodic inventory system. Required: 1. Calculate ending inventory and cost of goods sold for January using FIFO. 2. Calculate ending inventory and cost of goods sold for January using average cost.

Investment in stock X is $15,600 and Investment in stock Y is $8,400

Explanation:

Assuming the weights of the Stock X and Stock Y be Q and R

So,

Q + R = 1

R = 1 - Q

(Q × 13%) + (R × 12%) = 12.65%

13 Q + [( 1- Q) × 12] = 12.65

13 Q - 12 Q + 12 = 12.65

Q = 12.65 - 12

Q = 0.65

R = 1 - Q

  = 1 - 0.65

  = 0.35 or 35%

Therefore, the investment in stock X and Y is as:

Investment in stock X = Amount × Percentage

                                    = $24,000 × 65%

                                    = $15,600

Investment in stock Y = Amount × Percentage

                                    = $24,000 × 35%

                                    = $8,400