Burke Ltd. began operations in February 2008 with 4,500 units of inventory that it purchased at a cost of $12.00 each. The company?s purchases during February were as follows:

Sales during February:

Feb 4?????.1,500 units

Feb 15?????5,800 units

Feb 24?????7,200 units

Burke uses a periodic inventory system.

Required:

a. Calculate the cost of goods sold for February using the weighted average cost flow assumption.

b. Calculate the cost of goods sold for February using the first-in, first-out cost flow assumption.

c. Which inventory cost flow assumption results in the greater net income for February? Which results in the smaller?

d. Which inventory cost flow assumption results in the larger inventory balance at the end of February? Which results in the smaller?

Transcribed Image Text:

Feb 6 Feb 14 Feb 23 Feb 28 3,500 units @ $12.00 2,000 units @ $11.80 8,200 units @ $11.65 3,600 units @ $11.40 Feb 6 Feb 14 Feb 23 Feb 28 3,500 units @ $12.00 2,000 units @ $11.80 8,200 units @ $11.65 3,600 units @ $11.40

Answer rating: 100% (QA)

Weighted average cost per unit units per unit total beginning invent... View the full answer