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(Calculating FIFO, Weighted Average CostPeriodic) The following information is for the inventory of mini-kettles at Funnell Company Limited for the month of May: Date Transaction

(Calculating FIFO, Weighted Average CostPeriodic) The following information is for the inventory of mini-kettles at Funnell Company Limited for the month of May:

Date Transaction Units In Unit Cost Total Units Sold Unit Price Total
May 1 Balance 100 $4.10 $410
6 Purchase 800 4.20 3,360
7 Sale 300 $7.00 $2,100
10 Sale 300 7.30 2,190
12 Purchase 400 4.50 1,800
15 Sale 200 7.40 1,480
18 Purchase 300 4.60 1,380
22 Sale 400 7.40 2,960
25 Purchase 500 4.58 2,290
30 Sale 200 7.50 1,500
Totals 2,100 $9,240 1,400 $10,230

Instructions

a. Assuming that the periodic inventory method is used, calculate the inventory cost at May 31 under each of the following cost flow formulas:

  • 1. FIFO
  • 2. Weighted average (round the weighted average unit cost to the nearest one tenth of one cent)

b. Which method will yield the higher current ratio or gross profit?

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