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Inventory Methods: FIFO, LIFO, Average Cost

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Express Lane, 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.

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.

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Solution Summary

In this solution we apply three inventory methods to a problem.