Sandoval Skateshop Ltd. reports the following inventory transactions for its skateboards for the month of April. The company uses a perpetual inventory system.

Instructions
(a) Determine the cost of goods sold and cost of ending inventory using FIFO.
(b) Assume that Sandoval wants to change to the average cost method. What guidelines must it consider before making this change?
(c) If the company does change to the average cost method and prices continue to fall, would you expect the cost of goods sold and ending inventory amounts to be higher or lower than these amounts when using FIFO?

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Date Explanation Units Unit Cost Total Cost Apr. 1 Beginning inventory 30 15 (35) 20 (25) 20 $1,500 675 6 Purchases 9 Sales 14 Purchases 20 Sales 28 Purchases 45 40 800 35 700