Analyzing and Interpreting the Effects of the FIFO/Weighted-Average Choice on the Inventory Turnover Ratio LO7-6

The records at the end of January 2017 for All Star Company showed the following for a particular kind of merchandise:

Inventory, December 31, 2016, at FIFO: 19 units @ $12 = $228

Inventory, December 31, 2016, at weighted average: 19 units @ $10 = $190

Transactions		Units		Unit Cost		Total Cost
Purchase, January 9, 2017		25		15		$375
Purchase, January 20, 2017		50		16		800
Sale, January 11, 2017 (at $38 per unit)		40
Sale, January 27, 2017 (at $39 per unit)		28

Required:

Compute the inventory turnover ratio under the FIFO and weighted-average inventory costing methods and a perpetual inventory system (show computations and round to the nearest dollar). Explain which method you believe is the better indistatements of earnings under the FIFO and weighted-cator of the efficiency of inventory management.