A New Textbook Is Published in the Spring of 2009

question 77

Essay

A new textbook is published in the spring of 2009.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 2009,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:

Autokinetic Effect

A phenomenon where a still, small point of light in an otherwise dark or featureless environment appears to move, due to involuntary eye movements.

Idiographic Approach

An approach in psychology that focuses on understanding the unique aspects of an individual's personality or behavior.

Personality Goals

The objectives or aims that an individual sets for themselves concerning their personal growth, behaviors, and attitudes, shaping their personality development.

Big Five

A model describing human personality through five broad domains: openness, conscientiousness, extraversion, agreeableness, and neuroticism.