Cost Flow Assumptions and Methods The following three identical units of Item P401C are purchased during April: ($3123 units) Assume that one unit is sold on April 27 for $131. Determine the gross profit for April and ending inventory on April 30 using the (a) firstin, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Feedback Check My Work a. Sales - cost of goods sold = gross profit. FIFO means that the first units purchased are assumed to be the first to be sold. Therefore, ending inventory is made up of the most recent purchases. b. Sales - cost of goods sold = gross profit. LIFO means the last units purchased are assumed to be the first to be sold. Therefore, ending inventory is made up of the first purchases. c. Sales - cost of goods sold = gross profit. Average cost means the average cost of all available units purchased is applied to the number of units sold and in ending inventory