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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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