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Inventory Costing Methods

Neyman Inc. has the following data for purchases and sales of inventory:

DateUnitsCost per UnitBeginning inventory$22$$$400$Purchase $1,$ Feb. $24120345$Sale $1140$Purchase $2,$ July $2175310$Purchase $3,$ Oct. $3190270$Sale $2215$

All sales were made at a sales price of $$460$ per unit. Assume that Neyman uses a perpetual inventory system.

Required:

$1.$ Compute the cost of goods sold and the cost of ending inventory using the FIFO, LIFO, and average cost methods. $($Note: Use four decimal places for per$-$unit calculations and round all other numbers to the nearest dollar.$)$

$$FIFOLIFOAverage CostCost of ending inventoryfill in the blank $1$ of $6$$fill in the blank $2$ of $6$$fill in the blank $3$ of $6$$Cost of goods soldfill in the blank $4$ of $6$$fill in the blank $5$ of $6$$fill in the blank $6$ of $6$$

$2.$ Conceptual Connection: Why is the cost of goods sold lower with LIFO than with FIFO?

Cost of goods sold is fill in the blank $1$ of $2$

higherlowerlower

with LIFO than with FIFO because the prices of inventory are fill in the blank $2$ of $2$

fallingraisingfalling

$.$