The following merchandise inventory transactions occurred during the month of May for the Super Stars, Inc.: May

Question:

The following merchandise inventory transactions occurred during the month of May for the Super Stars, Inc.:

May 1 Inventory on hand was 2,000 units at $10 each

May 9 Sold 1,000 units at $15 each

May 15 Purchased 1,500 units at $11 each

May 21 Sold 1,250 units at $14 each

May 29 Purchased 3,000 units at $9 each

Requirements

1. Assume Super Stars uses a periodic record-keeping system and compute the cost of goods sold for the month ended May 31 and ending inventory at May 31 using each of the following cost flow methods:

a. FIFO

b. LIFO

c. Weighted average cost

2. Using the information for item (1), calculate the inventory turnover ratio and average days in inventory for the month of May for each method.

3. Assume Super Stars uses the perpetual inventory system and compute the cost of goods sold for the month ended May 31 and ending inventory at May 31 using each of the following cost flow methods:

a. FIFO

b. LIFO

Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...