The beginning inventory and purchases of an item for the period were as follows:

Beginning inventory......................................... 6 units at $73 each

First purchase................................................ 10 units at $72 each

Sales................................................................ 9 units

Second purchase.......................................... 18 units at $74 each

Third purchase.............................................. 10 units at $75 each

Sales.............................................................. 22 units

The company uses the perpetual inventory system.

Required:

Determine the cost of the inventory (EI) and cost of goods sold (COGS) by each of the following methods, presenting details of your computations:

	Ending Inventory	Cost of Goods Sold
a) First-in, first-out method	?	?	(6 marks)
b) Last-in, first-out method	?	?	(6 marks)

c) In a deflationary period, which of the above method gives the highest profit? Why?

(2 marks)