Question

The Big Ham Corporation is manufacturing widgets; they estimate that they will sell 25,000 widgets in the next five months. Big Ham Corporation will manufacture 5,000 widgets each month however the sales for each month will be as follows, January 3,250, February 4,100, March 6,200, April 5,600, and May, 5850. If Big Ham Corporation has no beginning inventory to start in January, and the fixed cost per unit is $1.24 and the variable cost per unit is $2.35, they sell each widget at $7.50.

Calculate the cost of inventory for each month.

If in the month of March the variable cost increase from $2.35 to $2.94 and the Big Ham Corporation uses the FIFO method, calculate the new cost of inventory for each month.

Please show work - Thank you!!!!!

Answer 1

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