Johnson Company reports the following for the month of June. Unit Cost $5 Date Explanation Inventory Purchase Units 225 Total Cost $1,125 3,150 5,250 June 1 12 525 6 7 23 Purchase 750 30 Inventory 280 (a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO (2) LIFO, and (3) average cost. (b) Which costing method gives the highest ending inventory? The highest cost of goods sold? Why? (c) How do the average-cost values for ending inventory and cost of goods sold relate to ending inventory and cost of goods sold for FIFO and LIFO? Answer: (a) FIFO Beginning inventory Purchases June 12 June 23 Cost of goods available for sale Less: Ending inventory Cost of goods sold (b) LIFO Cost of goods available for sale Less: Ending inventory Cost of goods sold (c) AVERAGE-COST

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