Reword the following answer: Let's delve deeper into the explanation of each inventory valuation method used to compute the Cost of Goods Sold (COGS): ### Inventory Details Recap: - **May 7 Purchase:** 50 units at $7 each - **July 28 Purchase:** 30 units at $15 each - **June 1 Sale:** 25 units - **August 27 Sale:** 30 units ### (a) FIFO (First-In, First-Out) FIFO assumes that the oldest inventory items are sold first. 1. **June 1 Sale (25 units):** - Since the first purchase was on May 7, these 25 units are taken from this batch. - Calculation: 25 units * $7/unit = $175 2. **August 27 Sale (30 units):** - The remaining 25 units from the May 7 purchase are sold first. - Calculation: 25 units * $7/unit = $175 - The next 5 units come from the July 28 purchase. - Calculation: 5 units * $15/unit = $75 3. **Total COGS under FIFO:** - Add the costs from both sales: $175 (June 1) + $175 (first 25 units of August 27) + $75 (remaining 5 units of August 27) = **$425** ### (b) LIFO (Last-In, First-Out) LIFO assumes that the most recently purchased inventory is sold first. 1. **June 1 Sale (25 units):** - Since this sale occurs before the July 28 purchase, it uses the May 7 inventory. - Calculation: 25 units * $7/unit = $175 2. **August 27 Sale (30 units):** - All 30 units are taken from the July 28 purchase. - Calculation: 30 units * $15/unit = $450 3. **Total COGS under LIFO:** - Add the costs from both sales: $175 (June 1) + $450 (August 27) = **$625** ### (c) Average-Cost This method averages the cost of all units available for sale duri