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Question - Cost Accounting & Budgeting - Inventory valuation Dave Ltd. had a beginning inventory for May comprising 600 units that had a cost of $30 per unit. A summary of purchases and sales during May is as follows
May 2nd sold 400 units
May 6th, purchased 1,400 units @ $32 per unit
May 10th sold 800 units
May 19th, purchased 1,000 units @ $34 per unit
May 23rd sold 1,300 units
May 30th purchased 500 units @ $36 per unit
Assuming Dave Ltd. uses a perpetual inventory system; calculate the value of goods purchased, Cost of goods sold and ending inventory under each of the following valuation methods:
a) Weighted average.
b) First in first out.
c) Carry out a comparative analysis of the two methods using their income statements.
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