Flanagan Company reports the following for the month of June.
|
Units |
Unit Cost |
Total Cost |
||
|
June 1 |
Inventory |
200 |
$5 |
$1,000 |
|
12 |
Purchase |
300 |
6 |
1,800 |
|
23 |
Purchase |
500 |
7 |
3,500 |
|
30 |
Inventory |
120 |
Instructions
(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and (2) LIFO.
(b) Which costing method gives the higher ending inventory? Why?
(c) Which method results in the higher cost of goods sold? Why?