GGG sold 14,000 units during the month.

Required:

Calculate inventory on 30th September and COGS for the month using each of the following inventory costing methods:

FIFO method (show your workings):


Weighted average cost method (show your workings):

 
Which method of inventory valuation has generated the lowest COGS for the month and what is the difference in COGS between the two inventory valuation methods?

Transcribed Image Text:

GGG Pty Ltd in accordance with organisational policy, procedures and practices uses a periodic inventory system and values its inventory using FIFO. GGG had the following records during the month of September: Date Sept 1 Sept 13 Sept 21 Total Description Beginning inventory Inventory purchased Inventory purchased Units 5,000 8,000 7,000 20,000 Unit Cost $2.00 $2.40 $2.60 Total Cost $10,000 $19,200 $18,200 $47,400 GGG Pty Ltd in accordance with organisational policy, procedures and practices uses a periodic inventory system and values its inventory using FIFO. GGG had the following records during the month of September: Date Sept 1 Sept 13 Sept 21 Total Description Beginning inventory Inventory purchased Inventory purchased Units 5,000 8,000 7,000 20,000 Unit Cost $2.00 $2.40 $2.60 Total Cost $10,000 $19,200 $18,200 $47,400

Answer rating: 100% (QA)

To calculate the inventory on 30th September and the Cost of Goods Sold COGS for the month using FIFO and the weighted average cost method well go ste... View the full answer