Which Method Shall We Use?
The White Wove Corporation began operations in 2008. A summary of the first quarter appears below:
|
|
Units |
Total Cost |
|
Purchases: |
|
|
|
January 2 |
250 |
$23,250 |
|
February 11 |
100 |
9,500 |
|
February 20 |
400 |
38,400 |
|
March 21 |
200 |
19,600 |
|
March 27 |
225 |
22,275 |
Other data:
|
|
Sales in |
Sales Price |
Operating |
|
|
Units |
per Unit |
Expenses |
|
January |
200 |
$140 |
$9,575 |
|
February |
225 |
142 |
7,820 |
|
March |
350 |
145 |
7,905 |
The White Wove Corporation used the LIFO perpetual inventory method and correctly computed an inventory value of $38,300 at the end of the first quarter. Management is considering changing to a FIFO costing method. They have also considered using a periodic system instead of the perpetual system presently being used. You have been hired to assist management in making the decision. What would you advise?