To illustrate the different inventory cost flow assumptions, consider the follow

Question

To illustrate the different inventory cost flow assumptions, consider the following example of Russell Company, which purchased inventory at three different times at three different prices. Russell purchased a total of 90 units, which cost a total of $1,410. On May 31st a customer purchased 30 units. Russell's selling price was $25 per unit. Fill in the table below, calculate Russell Company's sales revenue, cost of goods sold, gross profit and ending inventory balance under each of the three inventory cost flow assumptions. Round your answer to the nearest dollar. However, do not round intermediate calculations.

Explanation / Answer

FIFO LIFO Average cost Revenue 750 750 750 Cost of goods sold 330 600 470 Gross profit 420 150 280 Ending Inventory 1080 810 940

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