Inventory data for Moath Company are presented in E6.7.

Instructions

a. Compute the cost of the ending inventory and the cost of goods sold using the average-cost method.

b. Will the results in (a) be higher or lower than the results under (1) FIFO and (2) LIFO?

c. Why is the average unit cost not $6?

E6.7

Ballas Co. uses a periodic inventory system. Its records show the following for the month of May, in which 68 units were sold.

Transcribed Image Text:

Units Unit Cost Total Cost May 1 $ 8 $240 Inventory Purchases Purchases 30 15 25 11 275 24 35 12 420 Totals 90 $935