Applying and Analyzing Inventory Costing Methods

At the beginning of the current period, Chen carried $3,000$ units of its product with a unit cost of $$20.$ A summary of purchases during the current period follows:

During the current period, Chen sold $8,400$ 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.

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.

c$.$ Assume that Chen uses the average cost method. Compute its cost of goods sold for the current period and the ending inventory balance.

Do not round intermediate calculations. Round final answers to the nearest whole dollar amount.

d$.$ Which of these three inventory costing methods would you choose to:

Reflect what is probably the physical flow of goods?

Minimize income taxes for the period?

Report the largest amount of income for the period?