Farmville Tools sells shovels nationwide to farmers For March Farmville
Farmville Tools sells shovels nationwide to farmers. For March, Farmville had beginning inventory of 270 shovels with a per-shovel cost of $15. During March, Farmville made the following purchases of additional shovels.
Farmville uses a perpetual inventory system. During March, 525 shovels were sold on the following dates:
a. Determine the appropriate balance in ending inventory and cost of goods sold under each of the inventory cost flow assumptions (LIFO, FIFO, and moving average). Round all values to the nearest penny.
b. Compute the inventory turnover and days in inventory ratios under each inventory costing method.
c. Which method yields ratios that show the most effective turnover of inventory? Are the company's inventory sales different depending on the costing method chosen? If not, why are the ratios different?
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