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Calculate the cost of April ending inventory

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Reference no: EM132782009

Problem - Ben's Bargain has the following information that relates to the entity's inventory record for the month of April.

April

 

Units

Unit cost

Total cost

1

Beginning inventory

300

$3.00

$900

12

Purchases

600

2.80

1,680

24

Purchases

700

2.70

1,890

Ben's Bargain uses the periodic inventory system. A physical inventory count on 30 April showed that 600 units were on hand.

Required -

(a) Calculate the cost of April's ending inventory using the following methods:

i. FIFO

ii. LIFO

iii. Weighted average cost (round to the second decimal place).

(b) Which method resulted in the highest cost of ending inventory?

(c) Which method resulted in the highest gross profit - state the method only; you are not required to perform any calculations.

(d) Discuss your answer to (0). Why did this method result in the highest gross profit?

Reference no: EM132782009

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