Girvac, with no opening inventory, bought 1,000 units at 10, then 1,000 units at 12, then 1,000 units at 14, and sold 1,800 units. It is considering a move from weighted average cost (computed over the period, teaching assumption) to FIFO. Compute closing inventory under each formula and the difference.
- Quantity of batch 1
- 1,000
- Unit cost of batch 1
- 10
- Quantity of batch 2
- 1,000
- Unit cost of batch 2
- 12
- Quantity of batch 3
- 1,000
- Unit cost of batch 3
- 14
- Units sold
- 1,800