Answer:
Results are below.
Explanation:
<u>Under FIFO (first-in, first-out), the cost of goods sold is calculated using the cost of the firsts units incorporated into inventory.</u>
COGS= 2,000*38 + 6,200*40= $324,000
Income statement:
Sales= 8,200*75= 615,000
COGS= (324,000)
Gross profit= 291,000
Tax= (291,000*0.3)= (87,300)
Net operating income= 203,700
<u>Under the LIFO (last-in, first-out), the cost of goods sold is calculated using the cost of the lasts units incorporated into inventory.</u>
COGS= 8,000*40 + 200*38= $327,600
Income statement:
Sales= 615,000
COGS= (327,600)
Gross profit= 287,400
Tax= (287,400*0.3)= (86,220)
Net operating income= $201,180
