Chapter 6: Analyzing and Reporting Inventory and Cost of Goods Sold E6-5B. FIFO versus average cost (Learning Objectives 2 & 3) 15-20 min. Assume McCormack Tire Inc. completed the following perpetual inventory transactions for a line of tires: Beginning Inventory. Purchase.. Sale.. 27 tires @$140 39 tires @$136 42 tires @$204 Requirements 1. Compute cost of goods sold and gross profit using FIFO. 2. Compute cost of goods sold and gross profit using moving average. 3. Which method results in the largest gross profit? Why?