In June, Dakota Company reports the following for the month of June:

Instructions

(a) Compute cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average cost.

(b) Which costing method gives the highest ending inventory and the highest cost of goods sold? Why?

(c) How do the average cost values for ending inventory and cost of goods sold relate to ending inventory and cost of goods sold for FIFO and LIFO?

(d) Explain why the average cost is not $6.

Transcribed Image Text:

Date Explanation Units Unit Cost Total Cost June 1 1228 Inventory 200 $5 $1,000 Purchase 300 6 1,800 23 Purchase 500 7 3,500 30 Inventory 180