Howsham Company, Ltd. reports the following for the month of June.

Instructions
(a) Calculate the cost of the ending inventory and the cost of goods sold for
(1) FIFO and
(2) moving-average cost, using a perpetual inventory system. Assume a sale of 400 units occurred on June 15 for a selling price of £8 and a sale of 440 units on June 27 for £9.
(b) How do the results differ from E6-6?
(c) Why is the average unit cost not £6 [(£5 + £6 + £7) ÷ 3 = £6]?

Transcribed Image Text:

Units 200 300 500 160 Date Explanation lvutory Purchase Purchase luvntory Unit Cost June 1 12 23 30 Total Cost £1,000 1,800 3,500 £5