Use the company's data below to compare the of average cost and FIFO methods and compute the net income.

Company's Data

Beginning cash balance
$ 4000
Beginning inventory
6000 units @ 3
$ 18,000
Purchases
4000 units @4
$ 16,000
Sales
6000 units @ 12
$ 72,000
Operating expenses
$ 8,000
Income tax rate
40%

what is the  Average cost, FIFO,  Sales, COGS ,Gross profit,  Operating expenses, Income before tax, Income taxes, Net income

How much is the ending inventory and cash using the average cost?

In an inflationary period, which method leads to higher profits?

Answer rating: 100% (QA)

To compare the average cost and FIFO methods we need to calculate the cost of goods sold COGS and en... View the full answer