Calvin Inc. reports the following for the month of September 2018.

Date Explanation Units Unit Cost Total Cost

Sep 1 Inventory 120 $ 5 $ 600

Sep 12 Purchase 370 $ 6 $ 2,220

Sep 23 Purchase 200 $ 7 $ 1,400

Sep 30 Inventory 230

Instructions:

1) Compute the cost of the ending inventory and the cost of goods sold under (a) FIFO, (b) LIFO, and (c) average-cost. (Round average unit cost to three decimal places).

2) Which costing method gives the highest ending inventory? The highest cost of goods sold? Why?

3) How do the average-cost values for ending inventory and cost of goods sold relate to ending inventory and cost of goods sold for FIFO and LIFO?

4)) Explain why the average cost is not $6?