Arrow Corporations inventory records for a particular development program show the following at March 31: Mar 1 Beginning inventory............... 9 units @ $165 = $1,485

Mar 15 Purchase................................. 5 units @ 166 = 830

Mar 26 Purchase................................. 13 units @ 175 = 2,275

Question

1. Compute cost of goods sold and ending inventory using each of the following methods:

a. Specic unit cost, with seven $165 units and four $175 units still on hand at the end

b. Average cost

c. FIFO

d. LIFO

2. Which method produces the highest cost of goods sold? Which method produces the lowest cost of goods sold? What causes the difference in cost of goods sold?