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Marigold-Mart Centre Inc. opened for business on May 1, and uses a perpetual inventory system. During May, the company had the following purchases and sales

Marigold-Mart Centre Inc. opened for business on May 1, and uses a perpetual inventory system. During May, the company had the following purchases and sales for one of its products:

Purchases Sales
Date Units Unit Cost Units Unit Price
May 1 120 $100
3 80 $252
8 100 109
13 80 275
15 60 114
20 60 301
27 40 326

Determine the cost of goods sold and cost of ending inventory using (1) FIFO and (2) average cost. (Round Average answers to 2 decimal places, e.g. 5.75.)

FIFO Average
Cost of Goods Sold $ $
Ending Inventory $ $

Identify the cost formula the company should use if it wants to maximize gross profit and net income? (options: FIFO, average, neither)

Which cost formula produces the higher ending inventory valuation? (options: FIFO, average, neither)

Which cost formula produces the higher cash flow? (options: FIFO, average, neither)

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