1. Zeta Retail

Scenario: FIFO vs. Average Cost Method

Data:

• Beginning Inventory: 10,000 units at $5 per unit
• Purchases: 15,000 units at $6 per unit
• Ending Inventory: 8,000 units
• Sales: 17,000 units

Requirements:

1. Calculate the Cost of Goods Sold using the FIFO method for Zeta Retail.
2. Calculate the Cost of Goods Sold using the Average Cost method.
3. Compare the COGS under FIFO and Average Cost methods.
4. Discuss the impact of inventory valuation methods on financial reporting.
5. Recommend the most suitable method for Zeta Retail based on financial objectives.