Question: Inventory data for Moath Company are presented in E6.7. Instructions a. Compute the cost of the ending inventory and the cost of goods sold using

Inventory data for Moath Company are presented in E6.7.


Instructions

a. Compute the cost of the ending inventory and the cost of goods sold using the average-cost method.

b. Will the results in (a) be higher or lower than the results under (1) FIFO and (2) LIFO?

c. Why is the average unit cost not $6?


E6.7

Ballas Co. uses a periodic inventory system. Its records show the following for the month of May, in which 68 units were sold.


Units Unit Cost Total Cost May 1 $ 8 $240 Inventory Purchases Purchases 30 15 25 11 275 24 35 12 420 Totals 90 $935

Units Unit Cost Total Cost May 1 $ 8 $240 Inventory Purchases Purchases 30 15 25 11 275 24 35 12 420 Totals 90 $935

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