Inventory data for Daisy Cutters,Inc.,are provided below.Sales for the month were 500 units sold for $30 each.The company maintains a periodic inventory system.
Required:
1.Determine the gross profit for the month assuming the company uses the FIFO cost flow method.
2.Determine the gross profit for the month assuming the company uses the LIFO cost flow method.
3.Which method results in a higher cost of goods sold? Explain why.

Question

Inventory data for Daisy Cutters,Inc.,are provided below.Sales for the month were 500 units sold for $30 each.The company maintains a periodic inventory system.
  Required:
1.Determine the gross profit for the month assuming the company uses the FIFO cost flow method.
2.Determine the gross profit for the month assuming the company uses the LIFO cost flow method.
3.Which method results in a higher cost of goods sold? Explain why.

Quizplus · Accepted Answer

The Answer of Inventory data for Daisy Cutters,Inc.,are provided below.Sales for the month were 500 units sold for $30 each.The company maintains a periodic inventory system.
  Required:
1.Determine the gross profit for the month assuming the company uses the FIFO cost flow method.
2.Determine the gross profit for the month assuming the company uses the LIFO cost flow method.
3.Which method results in a higher cost of goods sold? Explain why.

Inventory Data for Daisy Cutters,Inc