During 2023, The Blizzard Company sold 1,350 units of its product on May 20 and 1,700 units on October 25, all at a price of $51 per unit. Incurring operating expenses of $7 per unit in selling the units, it began the year with, and made successive purchases of, units of the product as follows:

Required
Prepare a comparative income statement for the company for 2023, showing in adjacent columns the profits earned from the sale of the product, assuming the company uses a perpetual inventory system and prices its ending inventory on the basis of:
a. FIFO
b. Moving weighted average cost. Round unit costs to two decimal places.

Analysis Component:
If The Blizzard Company’s manager earns a bonus based on a percentage of gross profit, which method of inventory costing will they prefer?

Transcribed Image Text:

January 1 beginning inventory...... Purchases: April 2 June 14. Aug. 29.. Total.... 610 units costing $29 per unit @ $28 per unit 810 units 320 units @ $27 per unit @ $26 per unit 1,340 units 3,080 units