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Dunbar Distribution markets CDs of numerous performing artists. At
the beginning of March, Dunbar had in beginning inventory 2,500 CDs with
a unit cost of $7. During March Dunbar made th following purchases of
March 5 – 2,000 @ $8
March 13 – 3,500 @ $9
March 21 – 5,000 @ $10
March 26 – 2,000 @ $11
During March 12,000 units were sold. Dunbar used a periodic inventory system.
a. Determine the cost of goods available for sale
b. Determine 1. the ending inventory and 2, the cost of goods sold
under each of the assumed cost flow methods (FIFO, LIFO, and average
cost). Prove te accuracy of the cost of goods sold under the FIFO and
LIFO mehtods. (Note: for average cost, round cost per unit to three
c. Which cost flow method results in 1. the highest inventory amount
for the balanc sheet abd 2. the highest cost of goods sold for the