Reference no: EM132692821

Question - The following information relates to the inventory of Margaret's Megamart Ltd during December. Ignore GST.

Date		Units	Units cost	Total cost
1/12	Beginning inventory	700	$12.00	$8,400
10/12	Purchase	500	12.60	6,300
15/12	Purchase	300	13.20	3,960
23/12	Purchase	500	14.00	7,000
	Totals	2,000		$25,660

Margaret's Megamart Ltd uses the periodic inventory system. A physical count on 31 December verified that 650 units were on hand.

Required -

a) Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO costing method.

b) Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method.

c) Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results.