EcoHome Goods uses a periodic inventory system. The transactions for February are as follows: Date Activities Units
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Question:
EcoHome Goods uses a periodic inventory system. The transactions for February are as follows:
Date | Activities | Units Acquired at Cost | Units Sold at Retail |
Feb. 1 | Beginning inventory | 180 units @ $45 per unit | |
Feb. 3 | Purchase | 450 units @ $50 per unit | |
Feb. 10 | Sales | 400 units @ $70 per unit | |
Feb. 18 | Purchase | 300 units @ $55 per unit | |
Feb. 25 | Sales | 200 units @ $75 per unit |
For specific identification, the February 10 sale consisted of 80 units from beginning inventory and 320 units from the February 3 purchase; the February 25 sale consisted of 150 units from the February 18 purchase and 50 units from the February 3 purchase.
Required:
- Compute the ending inventory and COGS using the specific identification method.
- Calculate the weighted average cost per unit and the ending inventory value.
- Compare the financial performance of EcoHome Goods under FIFO and LIFO inventory costing methods.
- Provide a recommendation on which inventory costing method EcoHome Goods should use, considering seasonal inventory variations.
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