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Management 200 – Introductory Financial Accounting– Maymester 2010
Krannert School of Management - Purdue University
Homework 4 – due Thursday, March 26, 2010 - SOLUTION
This homework must be turned in on this sheet of pages (please staple). It is preferred that
you print it out two-sided if at all possible. Assignments not completed on this form will not be graded. The
grade for this assignment will be based on the correctness of a partial portion of the assignment – the full
assignment will not be graded. Please print your name and PUID clearly and legibly in the spaces above.
PART A: Oz Imports was formed in 2006 to sell a single product, Vegemite, which is
imported from Australia.
The price of this product was a constant $5 per unit during
2006 and 2007, but due to unfavorable exchange rates the cost of this product more than
doubled during 2008 and 2009.
Sales for 2009 (2008) totaled 296,000 units for a total of
$2,664,000 (267,000 units for a total of $2,136,000).
Oz uses a periodic inventory
system and provides the following information about cost of goods purchased during the
last two years:
Opening Inventory (12/31/07)
49,000 units @ $5.00
Purchase, May 13, 2008
140,000 units @ $6.00
Purchase, September 28, 2008
155,000 units @ $7.00
Purchase, April 23, 2009