In October 2013, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicoles Getaway Spa would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. Nicoles Getaway Spa would keep track of its new inventory using a perpetual inventory system. On December 30, 2013, Nicoles Getaway Spa purchased 10 units at a total cost of $6.30 per unit. Nicole purchased 40 more units at $8.30 in February 2014, but returned 20 defective units to her supplier. In March, Nicole purchased 20 units at $10.30 per unit. In May, 50 units were purchased at $10 per unit; however, Nicole took advantage of a 2/10, n/30 discount from her supplier. In June, NGS sold 50 units at a selling price of $12.30 per unit and 30 units at $10.30 per unit.

Required: 1. State whether the transportation cost included in each purchase should be recorded as a cost of the inventory or immediately expensed.

2. Compute the Cost of Goods Available for Sale, Cost of Goods Sold, and Cost of Ending Inventory using the first-in, first-out (FIFO) method. (Round "Cost per Unit" and "Total" to 2 decimal places.)

3. Calculate the inventory turnover ratio, using the inventory on hand at December 31, 2013, as the beginning inventory. (Round the Average Inventory to two decimal places.)