During 2014, the Blizzard Company sold 1,350 units of its product on May 20 and 1,700 units on October 25, all at a price of $51 per unit. Incurring operating expenses of $7 per unit in selling the units, it began the year with, and made successive purchases of, units of the product as follows:

Required:
Prepare a comparative income statement for the company for 2014, showing in adjacent columns the net incomes earned from the sale of the product, assuming the company uses a perpetual inventory system and prices its ending inventory on the basis of:
a. FIFO
b. Moving weighted average cost. Round unit costs to two decimal places.
Analysis Component:
If the Blizzard Company's manager earns a bonus based on a percentage of gross profit, which method of inventory costing will she prefer?

Transcribed Image Text:

January 1 Beginning inventory... Purchases: .........610 units costing $29 per unit 810 units $28 per unit . 320 units $27 per unit $26 per unit April June 14 Aug. 29.1340 units Total