The XYZ Corporation is manufacturing widgets; they estimate that they will sell 25,000 widgets in the next five months. XYZ Corporation will manufacture 5,000 widgets each month; however, the sales for each month will be as follows: January 3,250; February 4,100; March 6,200; April 5,600; and May, 5850. If XYZ Corporation has no beginning inventory to start in January, and the fixed cost per unit is $1.24 and the variable cost per unit is $2.35, they sell each widget at $7.50.

A.Calculate the cost of inventory for each month.

B. If in the month of March the variable cost increase from $2.35 to $2.94 and the XYZ Corporation uses the FIFO method, calculate the new cost of inventory for each month.