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The records at the end of January of the current year for Young Company showed the following for a particular kind of merchandise: Beginning Inventory
The records at the end of January of the current year for Young Company showed the following for a particular kind of merchandise:
Beginning Inventory at FIFO: 14 Units @ $20 = $280 |
Beginning Inventory at LIFO: 14 Units @ $16 = $224 |
Transactions | Units | Unit Cost | Total Cost | ||||
Purchase, January 9 | 30 | $ | 18 | $ | 540 | ||
Purchase, January 20 | 54 | 23 | 1,242 | ||||
Sale, January 21 (at $42 per unit) | 40 | ||||||
Sale, January 27 (at $43 per unit) | 29 | ||||||
|
Required:
1. Compute the inventory turnover ratio for the month of January under the FIFO and LIFO inventory costing methods. (Do not round intermediate calculations and round your final answers to 2 decimal places.)
2. Which costing method is the more accurate indicator of the efficiency of inventory management?
FIFO | |
LIFO | |
No accuracy difference |
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