A New Textbook Is Published in the Spring of 2018

question 6

Essay

A new textbook is published in the spring of 2018.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 2018,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:

Black-Run Institutions

Organizations or establishments operated and managed primarily by people of African descent.

African Descent

Relating to people whose ancestors were native to the African continent, often used in the context of discussions on race and identity.

Approximately

A term used to indicate that a given number or description is close to, but not exactly, a specific value or detail.

Annual Holiday

A yearly recurring festival or celebration, often marked by a specific tradition or honor, recognized either nationally, culturally, or religiously.