INVENTORY COSTING METHODS Neyman, Inc. has the following data for purchases and sales of inventory:

Date Units Cost per Unit Beginning inventory 22 $38 Feb. 24 purchase 110 37 Sales 120 July 2 purchase 170 33 Oct. 31 purchase 90 27 Sales 262 All sales were made at a sales price of $45 per unit. Assume that Neyman uses a perpetual inventory system.

Required:

. Compute the cost of goods sold and the cost of ending inventory using the FIFO, LIFO, and average cost methods. (Use four decimal places for per unit calculations and round all other numbers to the nearest dollar.)

. Why is the cost of goods sold lower with LIFO than with FIFO?

Exercise