A new supplier has approached Graphic Artz Co., offering to supply the merchandise inventory at a cost of $11 per unit.  What should the company consider when deciding whether or not to change to the new supplier?

Planning the solution

• Prepare an inventory valuation schedule for each method of costing inventory

• Journalize the purchase on January 16 and the sale on January 28 by taking the relevant information from the inventory valuation charts you created (COGS) and the charts given (sales prices), for each method.