Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date March 1 March 5 March 9 March 18 March 25 March 29 Activities Beginning inventory Purchase Sales Purchase Purchase Sales Totals Units Acquired at Cost 170 units @ $52.40 per unit 260 units @ $57.40 per unit 120 units @ $62.40 per unit 220 units @ $64.40 per unit 770 units Units Sold at Retail 330 units @ $87.40 per unit 200 units @ $97.40 per unit 530 units

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in…