LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 110 barrels of crude oil:

Beginning inventory and purchases	Barrels	Barrel cost	Total cost
January 1	134	$ 95	$ 12,730
March 1	59	101	5,959
June 1	74	98	7,252
September 1	84	90	7,560
December 1	59	103	6,077
	410		$ 39,578