(Calculating FIFO, Weighted Average Cost—Periodic) The following information is for the inventory of mini-kettles at Funnell...

(Calculating FIFO, Weighted Average Cost—Periodic) The following information is for the inventory of mini-kettles at Funnell Company Limited for the month of May:

Date	Transaction	Units In	Unit Cost	Total	Units Sold	Unit Price	Total
May 1	Balance	100	$4.10	$ 410
6	Purchase	800	4.20	3,360
7	Sale				300	$7.00	$ 2,100
10	Sale				300	7.30	2,190
12	Purchase	400	4.50	1,800
15	Sale				200	7.40	1,480
18	Purchase	300	4.60	1,380
22	Sale				400	7.40	2,960
25	Purchase	500	4.58	2,290
30	Sale				200	7.50	1,500
Totals		2,100		$9,240	1,400		$10,230

Instructions

a. Assuming that the periodic inventory method is used, calculate the inventory cost at May 31 under each of the following cost flow formulas:

1. FIFO
2. Weighted average (round the weighted average unit cost to the nearest one tenth of one cent)

b. Which method will yield the higher current ratio or gross profit?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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