Lakshmi Ltd. reports the following inventory transactions in a periodic inventory system for the month of June. A physical inventory count determined that 225 units were on hand at the end of the month.

Instructions
(a) Determine the cost of the ending inventory and cost of goods sold using
(1) FIFO and
(2) Average cost. (For average, use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
(b) For item 2 of part (a), explain why the average unit cost is not $6.50 [($5 + $6 + $7 + $8) ÷ 4].
(c) By how much do the results for part (a) differ from E6-6, where the same information was used in a perpetual inventory system? Why?

Transcribed Image Text:

Date Explanation Units Unit Cost Total Cost 150 750 1,380 3,150 1,200 Beginning inventory 12 Purchases 16 Purchases 23 Purchases 730 450 150 6