During its first year of operation Lux Company purchased 5 600
During its first year of operation, Lux Company purchased 5,600 units of a product at $42 per unit. During the second year, it purchased 6,000 units of the same product at $48 per unit. During the third year, it purchased 5,000 units at $60 per unit. Lux managed to have an ending inventory each year of 1,000 units. The company uses the periodic inventory system.
Prepare cost of goods sold statements that compare the value of ending inventory and the cost of goods sold for each of the three years using
1. The FIFO inventory costing method.
2. The LIFO method.
3. From the resulting data, what conclusions can you draw about the relationships between the changes in unit price and the changes in the value of ending inventory?

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help