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Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system.
Required:
1. Which method, FIFO or LIFO, will result in the highest cost of goods sold figure for January 2011? Why? Which method will result in the highest ending inventory balance? Why?
2. Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.
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Of those started, 80,000 were finished and the remaining 40,000 were left 20% complete. Calculate the equivalent units of production for the year using the weighted average method.
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