Howsham Ltd. reports the following for the month of June.

Instructions

a. Calculate the cost of the ending inventory and the cost of goods sold for (1) FIFO and (2) movingaverage cost, using a perpetual inventory system. Assume a sale of 400 units occurred on June 15 for a selling price of 8 and a sale of 440 units on June 27 for 9.

b. Why is the average unit cost not 6 [(5 + 6 + 7) 3 = 6]?

the table has been produced for you below

Date Explanation Units Unit Cost Total Cost June 1 Inventory 200 5 1,000 12 Purchase 300 6 1,800 23 Purchase 500 7 3,500 30 Inventory 160 (1) FIFO Date Purchases Cost of Goods Sold Balance 1 June 12 15 23 27