Question

Date Items Cost Total Cost

March 1 10 $120 $1,200

March 4 13 $115 $1,495

March 16 20 $105 $2,100

March 28 18 $100 $1,800

Total 61 $6,595

During the month, 20 of the items were sold. Identify which cost flow assumption would achieve the indicated result.

Group of answer choices

Higher net income

FIFO            Weighted-Average            LIFO      

Lower net income

FIFO            Weighted-Average            LIFO      

Higher Inventory on the Balance Sheet

FIFO            Weighted-Average            LIFO      

Lower Inventory on the Balance Sheet

FIFO            Weighted-Average            LIFO      

Answer 1

Higher net income	LIFO
Lower net income	FIFO
Higher Inventory on the Balance Sheet	LIFO
Lower Inventory on the Balance Sheet	FIFO

Workings:
Average cost per unit	108.114754	=6595/61
FIFO:
Cost of goods sold	2350	=(10*120)+(20-10)*115
Ending inventory	4245	=6595-2350
LIFO:
Cost of goods sold	2010	=(18*100)+(20-18)*105
Ending inventory	4585	=6595-2010
FIFO:
Cost of goods sold	2162	=20*108.1148
Ending inventory	4433	=6595-2162
Higher Cost of goods sold would provide lower net income