Causwell Company began 2018 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During2018 an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the endof 2018 (20,000 units therefore were sold during 2018). Causwell uses a periodic inventory system. Cost of goodssold for 2018, applying the average cost method, is $115,000. The company is interested in determining what costof goods sold would have been if the FIFO or LIFO methods were used.Required:1. Determine the cost of goods sold for 2018 using the FIFO method. [Hint: Determine the cost per unit of 2018purchases.]2. Determine the cost of goods sold for 2018 using the LIFO method.
Causwell Company began 2018 with 10,000 units of inventory on hand. The cost of each unit was $5.00. During
2018 an additional 30,000 units were purchased at a single unit cost, and 20,000 units remained on hand at the end
of 2018 (20,000 units therefore were sold during 2018). Causwell uses a periodic inventory system. Cost of goods
sold for 2018, applying the average cost method, is $115,000. The company is interested in determining what cost
of goods sold would have been if the FIFO or LIFO methods were used.
Required:
1. Determine the cost of goods sold for 2018 using the FIFO method. [Hint: Determine the cost per unit of 2018
purchases.]
2. Determine the cost of goods sold for 2018 using the LIFO method.
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