Question: LMNO Inc. uses the FIFO method for inventory valuation. For the fiscal year ended December 31, 2023, the following data is provided: Beginning Inventory: 2,000

LMNO Inc. uses the FIFO method for inventory valuation. For the fiscal year ended December 31, 2023, the following data is provided:

Beginning Inventory: 2,000 units at $18 per unit
Purchases:
- April 1: 2,500 units at $20 per unit
- September 1: 3,000 units at $22 per unit

Sales:
- 5,500 units sold during the year

Ending Inventory: 1,000 units

a. Calculate the cost of goods sold (COGS) using the FIFO method. b. Determine the value of ending inventory using the FIFO method. c. Analyze how FIFO impacts LMNO Inc.’s operational efficiency and production costs. d. Discuss strategies LMNO Inc. could implement to optimize inventory turnover under FIFO. e. Evaluate the risk factors associated with maintaining high levels of ending inventory. f. Recommend cost control measures for LMNO Inc. to enhance profitability through effective inventory management.

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