Products sold were snow blowers and lawn mowers

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Cost flow assumptions FIFO and LIFO using a periodic system Mower Blower Sales Co. started business on January 20, 2013. Products sold were snow blowers and lawn mowers. Each product sold for $700. Purchases during 2013 were as follows:

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The December 31, 2013, inventory included 10 blowers and 25 mowers. Assume the company uses a periodic inventory system.

Required:
a. What will be the difference between ending inventory valuation at December 31, 2013, under the FIFO and LIFO cost flow assumptions? (Hint: Compute ending inventory under each method, and then compare results.)
b. If the cost of mowers had increased to $480 each by December 1, and if management had purchased 30 mowers at that time, which cost flow assumption was probably being used by the firm? Explain your answer.

Reference no: EM13911785

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