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 $$21.$ A summary of purchases during the

current period follows:

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.

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.

d$.$ Which of these three inventory costing methods would you choose to $($assume a period of rising prices$)$:

Reflect what is probably the physical flow of goods?

Minimize income taxes for the period?

Report the largest amount of income for the period?