Question $4$

Fatigues Surplus began May $2021$ with $80$ stoves that cost $$10$ each. During the month, the

company made the following purchases at cost:

$($Click the icon to view the purchases.$)$

The company sold $296$ stoves, and at May $31,$ the ending inventory consisted of $64$ stoves.

The sales price of each stove was $$51.$

Read the requirements.

Requirement $1.$ Determine the cost of goods sold and ending inventory amounts for May

under the average$-$cost$,$ FIFO, and LIFO costing methods. Round the average cost per unit to

two decimal places, and round all other amounts to the nearest dollar.

Cost of goods sold

Ending inventory

Data table

Requirements

Determine the cost of goods sold and ending inventory amounts for May under

the average$-$cost$,$ FIFO, and LIFO costing methods. Round the average cost

per unit to two decimal places, and round all other amounts to the nearest

dollar.

Explain why cost of goods sold is highest under LIFO. Be specific.

Prepare the Fatigues Surplus income statement for May. Report gross profit.

Operating expenses totaled $$4,750.$ The company uses average costing for

inventory. The income tax rate is $32\%.$