Fifo perpetual inventory method


Problem: The White Wove Corporation began operations in 2011. A summary of the firs quarter appears below:

Purchases:
January 2...............250 units...............$23,250

February 11............100 units...............$9,500

February 20.............400 units.........$38,400

March 21................200 units..............$19,600

March 27..................225 units..................$22,275

Other data:

January.....................200 sales in units sales price per unit $140 operating expenses $9,575

February.............225 sales in units sales price per unit $142 operating expenses $7,820

March.................350 sales in units sales price per unit $145 operating expenses $7,905

The White Wove Corporation used the FIFO perpetual inventory method and correctly computed an inventory value of $38,300 at the end of the first quarter.

Management is considering changing to a FIFO costing method.

It has also considered using a periodic system instead of the perpetual system presently being used.

You have been hired to assist management in making the decision.

What would you advise?

over 300 to 400 words

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Accounting Basics: Fifo perpetual inventory method
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