Comparison of Inventory Costing MethodsPeriodic System

Bitten Companys inventory records show 604 units on hand on October 1 with a unit cost of $5 each. The following transactions occurred during the month of October:

Date	Unit Purchases	Unit Sales
October 4		501 @ $11.00
October 8	806 @ $5.40
October 9		698 @ $11.00
October 18	701 @ $5.67
October 20		796 @ $12.00
October 29	791 @ $5.80

All expenses other than cost of goods sold amount to $2,979 for the month. The company uses an estimated tax rate of 30% to accrue monthly income taxes.

Required:

1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar.

Bitten Company

Comparison for Cost of Goods Sold and Ending Inventory Using the Periodic System

1. Prepare a chart comparing cost of goods sold and ending inventory using the periodic system and the following costing methods. In your calculations round weighted average unit cost to three decimal places and round all other calculations and your final answers to the nearest dollar.

Bitten Company
Comparison for Cost of Goods Sold and Ending Inventory Using the Periodic System
For Weighted Average, FIFO and LIFO Cost Methods
Inventory System	Cost of Goods Sold	Ending Inventory	Total
Weighted average	$	$	$
FIFO
LIFO

2. What does the Total column represent?

3. Prepare income statements for each of the three methods. When required, round your answers to the nearest dollar.

Bitten Company
Income Statement
For the Month of October
	Weighted Average	FIFO	LIFO
	$	$	$
	$	$	$
	$	$	$
	$	$	$

4. Will the company pay more or less tax if it uses FIFO rather than LIFO?

How much more or less? $