A New Textbook Is Published in the Spring of 2011

question 49

Essay

A new textbook is published in the spring of 2011. Your campus bookstore buys 400 copies at $70 each in June, an additional 1,000 copies in August at $72 each, and 600 copies in December at $75 each. At the end of December 2011, the bookstore has sold 1,900 copies of the text.
Find the cost of goods sold and the cost of ending inventory:
a) under the weighted average cost method. b) under the FIFO method.
c) under the LIFO method.
Using your calculations as a guide, explain how different inventory costing methods affect the numerator and
denominator of the inventory turnover ratio when unit costs are increasing. Conclude your explanation by identifying the method that produces the highest (and lowest) inventory turnover ratio.

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Definitions:

Medical Schools

Institutions dedicated to the education and training of individuals to become physicians or other healthcare professionals.

Selective Attention

The process of focusing on a particular object in the environment for a certain period while ignoring irrelevant data that is simultaneously occurring.

Structuralism

An approach in psychology and other social sciences focusing on analyzing the structure of the human mind and its perceptions, rather than its content.

Behaviorism

Behaviorism is a theory of learning based on the idea that all behaviors are acquired through conditioning and that environmental interactions shape behavior, largely ignoring mental states or innateness.