Can someone please help me on this FIFO/LIFO issue.

I need to determine the cost of goods for both FIFO and LIFO systems.

The information provided to me is as follows:


__________________________Number Unit Cost Total
of Units

Beginning Inventory 200 $2.50 $500
Purchases 1,000 $2.70 $2,700

Units Sold 900

and one last question What is the lowest taxable rate to determine which one provides the lowest taxable rate?

Thanks for the help

X-stream87

To answer your question to the FIFO/LIFO dilemia simply FIFO means that the first units to come in our the first to come out meaning the reaming beginning inventory of 200 units priced at $2.50 would be sold as well as 700 units of the purchases. However using LIFO means the last items to come in our the first to be sold so in that case LIFO should means you just straight out sold 900 units of the pruchases at $2.70 so sales should inventory ending inventory under FIFO should be.......$810 and ending inventory under LIFO should be.......$770 (2.7x100 and 2.5x200). hopefully this helps if not post under me and ill try to better answer your question.