At the beginning of its operations in October 2011, Mastiff Supplies Ltd. began with 8,500 units of inventory that it purchased at a cost of $8.00 each. The company's purchases during October were as follows:

Mastiff Supplies uses a perpetual inventory system. Required:
a. Calculate the cost of goods sold for October using the moving average cost flow assumption.
b. Calculate the cost of goods sold for October using the first-in, first-out cost flow assumption.
c. Which inventory cost flow assumption results in the greater net income for October? Which results in the smaller?
d. Which inventory cost flow assumption results in the larger inventory balance at the end of October? Which results in the smaller?
e. Compare your answers in parts "c" and "d" above and comment on the relationship between these items.

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4,500 units $8,00 1,500 units $7.80 7.200 units $8.10 3,600 units G $8,30 17,300 units October 5 32 29 Sales during October October3 16 26 3,500 units 7,800 units 8,200 units