Answer:
The computation is shown below:-
Explanation:
1. FIFO LIFO Average cost
Cost of goods sold
Beginning inventory $11,200 $11,200 $11,200
(400 units × $28))
purchases $16,625 $16,625 $16,625
(475 units × 35)
Goods available for use $27,825 $27,825 $27,825
Ending inventory $18,025 $15,575 $16,695
(525 units)
Cost of goods sold $9,800 $12,250 $11,130
under ending inventory = 475 × $35 + 50 × $28
FIFO = $18,025
LIFO ending inventory 400 × $28 + 125 × $35
= $15,575
Average cost = $27,825 ÷ $875
= 31.8
Ending inventory = 525 × 31.8
= $16,695
2. FIFO LIFO Average
Sales
(307 × $50) $15,350 $15,350 $15,350
Cost of goods sold $9,800 $12,250 $11,130
Gross Profit $5,550 $3,100 $4,220
Expenses $1,680 $1,680 $1,680
Net income $3,870 $1,420 $2,540
3. FIFO = 3
LIFO = 2
Average = 1
