Chapter 6, Problem S6.2SE

Determining inventory costing methods

Learning Objective 2

Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes.

Requirements

1. Which inventory costing method would best meet Ward’s goal?
2. Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need?

Use the following information to answer Short Exercises S6-3 through S6-6.

Boston Cycles started October with 12 bicycles that cost 542 each. On October 16, Boston bought 40 bicycles at 588 each. On October 31, Boston sold 34 bicycles for 5100 each.