The following information relates to the inventory of Margaret's Megamart Ltd during December. Ignore GST. Units cost $ 12.00 Total cost Date 1/12 Beginning inventory 10/12 Purchase 15/12 Purchase 23/12 Purchase Totals Units $ 8,400 6,300 3,960 7,000 $25,660 700 500 12.60 300 13.20 500 14.00 2,000 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.
The following information relates to the inventory of Margaret's Megamart Ltd during December. Ignore GST. Units cost $ 12.00 Total cost Date 1/12 Beginning inventory 10/12 Purchase 15/12 Purchase 23/12 Purchase Totals Units $ 8,400 6,300 3,960 7,000 $25,660 700 500 12.60 300 13.20 500 14.00 2,000 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.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter6: Inventories
Section: Chapter Questions
Problem 2PB: LIFO perpetual inventory The beginning inventory for Dunne Co. and data on purchases and sales for a...
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Transcribed Image Text:The following information relates to the inventory of Margaret's Megamart Ltd during December.
Ignore GST.
Units cost
$ 12.00
Total cost
Date
1/12 Beginning inventory
10/12 Purchase
15/12 Purchase
23/12 Purchase
Totals
Units
$ 8,400
6,300
3,960
7,000
$25,660
700
500
12.60
300
13.20
500
14.00
2,000
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.
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