The records for September show the movement of inventory for tomatoes, the main ingredient used in the pasta sauces made by Sergio’s Sauces Ltd.

Required

(a) Prepare the tomato inventory account for September using:
(i) FIFO cost (ii) CWA cost Interpret each inventory account by indicating the cost of tomatoes used in the product during September and the inventory balance in terms of quantity and value at 30 September.

(b) Identify which of the two costing methods would give the higher gross profit for the month, explaining your reasons.

Transcribed Image Text:

Receipts Issues September Quantity Price per tonne (tonnes) Quantity (tonnes) 1 1,000 5.00 2 1,000 5.50 3 750 14 750 15 1,000 6.00 16 750 29 1,000 6.50 30 750