Shawn Company had 100 units in beginning inventory at a total cost of $10,000. The company purchased 200 units at a total cost of $26,000. At the end of the year, Shawn had 75 units in ending inventory.
Instructions
- Compute the cost of ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO and (3) average-cost.
- Which costing method gives the higher ending inventory?. Why?
- Which method results in the higher cost of goods sold?. Why?
Solution
a.
1.
Shawn Company
FIFO Method
FIFO Method
2.
Shawn Company
LIFO Method
LIFO Method
3.
Shawn Company
Average-cost Method
Average-cost Method
b.
FIFO Method
c.
FIFO Method
d.
LIFO Method