Applying and Analyzing Inventory Costing Methods At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $22. A summary of purchases during the current period follows: Units Unit Cost Cost Beginning Inventory 1,000 $22 $22,000 Purchases: #1 1,800 24 43,200 2 800 28 22,400 1,200 37,200 #3 31 During the current period, Chen sold 2,800 units. a. Assume that Chen uses the first-in, first-out method. Compute its cost of goods sold for the current period and the ending inventory balance. Cost of Goods Sold $ 59,600 x Ending Inventory $ 59,600 b. Assume that Chen uses the last-in, first-out method. Compute its cost of goods sold for the current period and the ending inventory balance. Cost of Goods Sold $ 73,200 * Ending Inventory $ 46,000 C. Assume that Chen uses the average cost method. Compute its cost of goods sold for the current period and the ending inventory balance. Cost of Goods Sold $ 67,200 x Ending Inventory $ 52,000 d. Which of these three inventory costing methods would you choose to (assume a period of rising prices): 1. Reflect what is probably the physical flow of goods? FIFO 2. Minimize income taxes for the period? LIFO 3. Report the largest amount of income for the period? FIFO