The records at the end of January 2014 for All Star Company showed the following for a
Question:
Inventory, December 31, 2013, at FIFO: 19 units @ $ 12 = $ 228
Inventory, December 31, 2013, at weighted average: 19 units @ $ 10 = $ 190
Required:
Compute the inventory turnover ratio under the FIFO and weighted- average inventory costing methods and a perpetual inventory system (show computations and round to the nearest dollar). Explain which method you believe is the better indicator of the efficiency of inventory management.
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,...
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Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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