Study the “Calculating Inventory Turnover” portion of the chapter closely, whereby the cost of good sold divided by the average inventory equals the inventory turnover.
Required:
Compute two inventory turnover calculations as follows: Use the LIFO information in the previous assignment to first compute the average inventory and then to compute the inventory turnover.
Use the FIFO information in the previous assignment to first compute the average inventory and then to compute the inventory turnover.
The FIFO information assumes $90,000 in sales; beginning inventory 500 units @$50; purchases of 400 units @$50; 100 units @$65; 400 units @$80. ending units/inventory 10
LIFO INVENTORY: sales 20 units @$25
beginning inventory 10 units @5
purchases 10 units @$10 and 10 units at $15
ending inventory 10 units @$5