1. Epsilon Pharmaceuticals

Scenario: Weighted Average Cost Method

Data:

• Beginning Inventory: 2,000 units at $5 per unit
• Purchases: 5,000 units at $6 per unit
• Ending Inventory: 3,000 units
• Sales: 4,000 units

Requirements:

1. Calculate the Cost of Goods Sold using the weighted average cost method.
2. Determine the Cost of Goods Available for Sale.
3. Analyze the impact of inventory valuation methods on COGS and financial statements.
4. Discuss how Epsilon Pharmaceuticals can optimize inventory turnover.
5. Prepare a summary of Epsilon Pharmaceuticals' income statement.