The following information relates to the inventory of Margaret's Megamart Ltd during December. Ignore GST. Date Units Units cost Total cost 1/12 Beginning inventory 10/12 Purchase 15/12 Purchase 23/12 Purchase Totals 700 $ 12.00 $ 8,400 500 12.60 6,300 300 13.20 3,960 500 14.00 7,000 2,000 $25,660 Margaret's Megamart Ltd uses the periodic inventory system. A physical count on 31 December www ww verified that 650 units were on hand. Required: a) Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO costing method. b) Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method c) Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results.
The following information relates to the inventory of Margaret's Megamart Ltd during December. Ignore GST. Date Units Units cost Total cost 1/12 Beginning inventory 10/12 Purchase 15/12 Purchase 23/12 Purchase Totals 700 $ 12.00 $ 8,400 500 12.60 6,300 300 13.20 3,960 500 14.00 7,000 2,000 $25,660 Margaret's Megamart Ltd uses the periodic inventory system. A physical count on 31 December www ww verified that 650 units were on hand. Required: a) Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO costing method. b) Determine the Ending inventory and Cost of Sales for the month of December, using the weighted average costing method c) Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory? Explain your results.
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Transcribed Image Text:The following information relates to the inventory of Margaret's Megamart Ltd during December.
Ignore GST.
Date
Units
Units cost
Total cost
1/12 Beginning inventory
10/12 Purchase
15/12 Purchase
23/12 Purchase
Totals
700
$ 12.00
$ 8,400
500
12.60
6,300
300
13.20
3,960
500
14.00
7,000
2,000
$25,660
Margaret's Megamart Ltd uses the periodic inventory system. A physical count on 31 December
www ww
verified that 650 units were on hand.
Required:
a) Determine the Ending inventory and Cost of Sales for the month of December, using the FIFO
costing method.
b) Determine the Ending inventory and Cost of Sales for the month of December, using the
weighted average costing method
c) Which cost flow method(s) resulted in higher gross profit on sales? a higher ending inventory?
Explain your results.
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