Consider the following information.

	Units	Cost per unit	Total costs
Goods in inventory at start of year	1600	$1.20	$1920
Purchases, quarter 1	800	$1.40	$1120
Purchases, quarter 2	1000	$1.60	$1600
Purchases, quarter 3	1200	$1.80	$2160
Purchases, quarter 4	800	$2.00	$1600
	5400		$8,400

Goods sold during the year: 3000 units

Calculate the value of closing inventory and cost of sales using each of the following methods

1. First-in first-out
2. Last-in first-out
3. Weighted average
4. The cost per unit shows a gradual increase in price of the inventory items. What are the implications for the values of closing inventory, cost of sales and profits under the FIFO and LIFO methods?