1. Beta Pharmaceuticals

Scenario: FIFO vs. LIFO Impact

Data:

• Beginning Inventory: 2,500 units at $8 per unit
• Purchases:
  • April 1: 5,000 units at $10 per unit
  • October 1: 3,000 units at $12 per unit

• Ending Inventory: 4,000 units
• Sales: 6,500 units

Requirements:

1. Calculate the Cost of Goods Sold using the FIFO method.
2. Calculate the Cost of Goods Sold using the LIFO method.
3. Compare the COGS under FIFO and LIFO assumptions.
4. Discuss the tax implications of inventory valuation methods.
5. Recommend the most suitable method for Beta Pharmaceuticals.