Exercise 8-13

Presented below is information related to Blowfish radios for the Sheridan Company for the month of July.

Date		Transaction		Units In		Unit Cost		Total		Units Sold		Selling Price		Total
July 1		Balance		170		$3.80		$ 646
6		Purchase		1,360		3.90		5,304
7		Sale								510		$6.90		$ 3,519
10		Sale								510		7.20		3,672
12		Purchase		680		4.20		2,856
15		Sale								340		7.30		2,482
18		Purchase		510		4.30		2,193
22		Sale								680		7.30		4,964
25		Purchase		850		4.28		3,638
30		Sale								340		7.40		2,516
		Totals		3,570				$14,637		2,380				$17,153

a) Calculate average cost per unit. (Round answer to 2 decimal places, e.g. 2.76.)

b) Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under each of the following cost flow assumptions. (Round answers to 0 decimal places, e.g. 6,578.) (1) FIFO. (2) LIFO. (3) Weighted-average.

c)

Which of the methods used above will yield the lowest figure for gross profit for the income statement? weighted-average : LIFO : FIFO

d) Which of the methods used above will yield the lowest figure for ending inventory for the balance sheet?

weighted-average : LIFO : FIFO