Compute the cost of the ending inventory and the cost of

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Reference no: EM13578565

Tire company perpetual inventory records for a tire it produces and sells

	Number of units	Cost per unit
Beginning inventory	6,000	$12.25
Transfers to finished goods
March 3	12000	12.20
June 28	15000	12.10
Sept 12	11000	12.05
Nov 30	17000	11.95
Sales:
March 7	11000
July 8	18000
October 12	8000
December 7	16000

The company sold 53,000 tires during the year at $20 each

Questions:

A) Compute the cost of the ending inventory and the cost of goods sold using both FIFO and LIFO

B) Which of the two methods is a better representation of the balance sheet value for the inventory? Why?

C) What is the gross margin using each method?

D) Which method do you think is more representative of the firm's income? Why?

Reference no: EM13578565

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