Reference no: EM132822589

Problem 1: BSA Company had 12,000 units of product A on hand at January 1, costing P25 each. Purchases of product A during the month of January were: Jan 10 - 17,000 units at P24; Jan. 19 - 22,000 units at P23; Jan. 29 - 7,000 units at P25. A physical count on January 31 showed 22,000 units of product A on hand. Which of the following statements is INCORRECT?

Option 1: The average cost per unit of January 31 inventory under FIFO is P23.64.
Option 2: During January, the cost of sales under the FIFO is greater than under the simple average.
Option 3: At January 31, the cost of inventory under the simple average is higher than cost of inventory using the FIFO.
Option 4: The goods available for sale using FIFO perpetual inventory system is higher than using the simple average under the periodic inventory system.

Problem 2: BSA Company manufactures and sells Product A at P70 gross profit per unit, or 40%. How much is the cost per unit of Product A?

Option 1: P116.67
Option 2: P186.67
Option 3: P175.00
Option 4: P105.00