Given the inventory records of canned corn for the month provided below, calculate the value of the product consumed using the FIFO method and the last price inventory method (4 marks) Between these two inventory control methods which method would you recommend be used and why? (2 marks)
· Opening inventory on the 1st of the month: 18 cans @ $8.80
· Purchased on the 10th of the month: 24 cans @ $8.55
· Purchased on the 25th of the month: 12 cans @$8.70
· Closing inventory: 15 cans
b) A new manager starts at XYZ restaurant where they have used the FIFO inventory method for years. The new manager wants to switch to Latest Purchase Price Method. What impact would this have on the value of the inventory if you switch to the new method of tracking physical inventory?
A lot of turnover has happened at XYZ restaurant and a new employee starts mid-way through the month. At the end of the month the manager sends the new employee into the supply room to count all the supplies so month end calculations can be made. The new employee is eager to finish his shift and misses and entire shelf when counting inventory. Will this error impact on month-end net income? If so, is net income lower or higher than expected? (2 marks)