The Reuschel Company began 2018 inventory with 25,000 units at a cost of $8 per unit. During 2018, 65,000 units were purchased for $10.30 each. Sales for the year totaled 76,500 units leaving 13,500 units on hand at the end of 2018. Reuschel uses the periodic inventory systems and the LIFO inventory cost method.

REQUIRED:

1) Calculate COGS for 2018.

2) Calculate the effect of the LIFO on the income.