Plato Company reports the following for the month of June.

Instructions

(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average cost.
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(b) Which costing method gives the highest ending inventory? 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 Inventory 225 $5 $1,125 12 Purchase 375 6 2,250 23 Purchase 500 7 3,500 30 Inventory 180