Clarkson Company reports the following for the month of June.

Date Explanation Units Units Cost Total Cost

June 1 Inventory 200 $5 $1000

june 12 Purchase 400 $6 $2400

June 23 Purchase 300 $7 $2100

Inventory in hand on June 30 are 100 units.

A sale of 440 units occurred on June 15 for a selling price of $8 and a sale of 360 units on June 27 for $9.

1. Calculate the cost of goods sold for each cost flow assumption (FIFO, LIFO, AVERAGE) on June 15 and June 27, respectively. Show your work!

On June 15

FIFO

LIFO

AVERAGE

On June 27

FIFO

LIFO

AVERAGE

2. Calculate the value of the ending inventory and the cost of goods sold for each cost flow assumption (FIFO, LIFO, AVERAGE) for the month. Ending Inventory COGS
3. FIFO
4. LIFO
5. Average Show your work!

3. Why is the average unit cost not $6 [($5 + $6 + $7) 3 = $6]?

4. Which cost flow assumption gives the higher ending inventory? Why?

5. Which cost flow assumption results in the higher profit? Why?