Inventory Costing Methods

Tyler Company has the following information related to purchases and sales of one of its inventory items.

Date	Description	Units Purchased at Cost	Units Sold at Retail
Sept. 1	Beginning inventory	400 units @ $17
10	Purchase	600 units @ $18
20	Sales		670 units @ $31
25	Purchase	800 units at $20

Assume Tyler uses a perpetual inventory system.

Required:

Calculate ending inventory and cost of goods sold using the FIFO, LIFO, and average cost methods.

	FIFO	LIFO	Avg Cost
Cost of goods sold	$fill in the blank 1	$fill in the blank 2	$fill in the blank 3
Ending inventory	$fill in the blank 4	$fill in the blank 5	$fill in the blank 6

2. Which inventory costing method produces the highest amount for net income?

Average cost methodFIFOLIFOFIFO

3. Which inventory costing method produces the lowest amount for taxes?

Average cost methodFIFOLIFOLIFO

4. Which inventory costing method produces the highest amount for ending inventory?

Average cost methodFIFOLIFOFIFO

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