Newport Company reports the following for the month of June.

Instructions

(a) Calculate the cost of the ending inventory and the cost of goods sold for each cost flow assumption, using a perpetual inventory system. Assume a sale of 400 units occurred on June 15 for a selling price of $8 and a sale of 440 units on June 27 for $9.

(b) How do the results differ from E6-6 and E6-7?

(c) Why is the average unit cost not $6 [($5 + $6 + $7) - 3 = $6]?

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Date Explanation Units Unit Cost Total Cost June 1 Inventory 200 $5 $1,000 12 Purchase 300 6. 1,800 23 Purchase 500 7 3,500 30 Inventory 160