Yale Department Store maintains separate inventory records for each type of merchandise it sells. The inventory records for product type X show the following for the month of September.

	Units	Unit Cost	Unit Selling Price
Beginning inventory; 9/1	200	$3.00
Purchase, 9/8	150	3.20
Sale, 9/13	130		$5.00
Purchase, 9/19	50	3.50
Sale, 9/22	80		5.25
Purchase, 9/26	100	3.55
Purchase, 9/29	50	3.60
Sale, 9/30	80		5.50

Required

Assume that Yale uses a perpetual inventory system. Calculate the cost of ending inventory and the cost of goods sold for September under the following inventory valuation methods:

	Ending Inventory	Cost of Goods Sold
FIFO in dollars NOT units
LIFO in dollars NOT units
Average (moving) Cost in dollars NOT units

Use the back side of this sheet for your calculations!

September was a month of increasing inventory acquisition cost for Yale. Will FIFO or LIFO yield the lower net income under these circumstances? Explain why.

Given that Yale uses the LIFO method for external reporting, what amount is considered LIFO Reserve if the FIFO method was used for internal purposes for the month of September?

Assume that Yale has a 40% tax rate. How much tax savings will be generated if Yale uses the LIFO method for inventory valuation?