Problem

Inventory methods [10-15 min]Express Lane, Inc., a regional convenience store chain, maint...

Inventory methods [10-15 min]

Express Lane, Inc., a regional convenience store chain, maintains milk inventory by the gallon. The first month’s milk purchases and sales at its Freeport, FL, location follows:

Nov 2

1 gallon @ $2.00 each

6

2 gallons @ $2.10 each

13

2 gallons @ $2.20 each

14

The store sold 4 gallons of milk to a customer.

Requirement

1. Describe which costs would be sold and which costs would remain in inventory. Then, identify the amount that would be reported in inventory on November 15 using

a. FIFO.


b. LIFO.


c. average cost.

Step-by-Step Solution

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