? ezto.mheducation.com/hm.tpx points The records at the end of January 2012 for

Question

? ezto.mheducation.com/hm.tpx points The records at the end of January 2012 for Captain Company showed the following for a pa merchandise: Inventory, December 31, 2011, at FIFO: 17 Units @ $16 $272 Transactions Cost Cost Purchase, January 9, 2012 Sale, January 21, 2012 (at $39 per unit) Sale, January 27,2012 (at $40 per unit)29 Required: 1. Compute the inventory tunover ratio under the FIFO and LIFO inventory costing method $14 $392 28 51 37 Purchase, January 20, 2012 19 969 round intermediate calculations and round your final answers to 2 decimal places.) Answer is complete but not entirely correct. FIFO Inventory turnover ratio 252 LIFO Inventory turnover ratio 1.67 2. Which costing method is the more accurate indicator of the efficiency of inventory OOFIFO LIFO

Explanation / Answer

LIFO Turnover :

Cost of goods available for sale = 204+392+969 = 1565

Ending inventory = 204+(13*14) = 386

Beginning inventory = 204

Cost of goods sold = 1565-386 = 1179

Average inventory = (386+204)/2 = 295

LIFO inventory turnover = 1179/295 = 4.00

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