Inventory information for Part 311 of Monique Aaron Corp. discloses the following information for the month of June.
June 1 Balance 300 units .......... @ $10
11 Purchased 800 units ............ @ $12
20 Purchased 500 units ............ @ $13
June 10 Sold 200 units ............ @ $24
15 Sold 500 units @ .................. $25
27 Sold 300 units @ .................. $27
Instructions
(a) Assuming that the periodic inventory method is used, compute the cost of goods sold and ending inventory under
(1) LIFO and
(2) FIFO.
(b) Assuming that the perpetual inventory record is kept in dollars and costs are computed at the time of each withdrawal, what is the value of the ending inventory at LIFO?
(c) Assuming that the perpetual inventory record is kept in dollars and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO?
(d) Why is it stated that LIFO usually produces a lower gross profit than FIFO?