Carbondale Company Had the Following Data Available for the LastOperating Expenses Are $2,000 Per Month

The Answer is 1. a. FIFO Cost of Goods Sold: 10 × $55 $550 30 × $60 1,800 5 × $65 325 Total Cost of Goods Sold $2,675 b. LIFO Cost of Goods Sold: 25 × $60 $1,500 20 × $65 $1,300 Total Cost of Goods Sold $2,800 2. Difference in Cost of Goods Sold × 30% = Tax Savings ($2,800 - $2,675) × 30% = $37.50

Carbondale Company Had the Following Data Available for the LastOperating Expenses Are $2,000 Per Month

The Answer is 1. a. FIFO Cost of Goods Sold: 10 × $55 $550 30 × $60 1,800 5 × $65 325 Total Cost of Goods Sold $2,675 b. LIFO Cost of Goods Sold: 25 × $60 $1,500 20 × $65 $1,300 Total Cost of Goods Sold $2,800 2. Difference in Cost of Goods Sold × 30% = Tax Savings ($2,800 - $2,675) × 30% = $37.50

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Carbondale Company Had the Following Data Available for the Last

question 2

Essay

Carbondale Company had the following data available for the last six months:
$\begin{array} { | l | l | l | } \hline \text { Beg, inventory } & 10 \text { units } & \$ 55 \text { per unit } \\\hline \text { Purchase, } 3 / 1 & 30 \text { units } & \$ 60 \text { per unit } \\\hline \text { Sale, } 4 / 1 & 25 \text { units } & \$ 100 \text { per unit } \\\hline \text { Purchase, } 5 / 1 & 25 \text { units } & \$ 65 \text { per unit } \\\hline \text { Sale, } 6 / 1 & 20 \text { units } & \$ 100 \text { per unit } \\\hline\end{array}$
Operating expenses are $2,000 per month. The income tax rate is 30%.
Required:
1. Compute Cost of Goods Sold for the six months ending June 30 using:
a. FIFO perpetual
b. LIFO perpetual
2. How much will the company save in income taxes if they use LIFO instead of FIFO?

Definitions:

CEO

Chief Executive Officer, the highest-ranking executive in a company, responsible for major corporate decisions and overall management.

Corporate Level

Pertains to the highest strategic tier in an organization, involving decisions that affect the company as a whole.

CMO

Stands for Chief Marketing Officer, a senior executive responsible for overseeing the development and execution of strategies to promote a company's brand and products.

CEO

The Chief Executive Officer, the highest-ranking executive in a company, responsible for making major corporate decisions, managing overall operations, and acting as the main point of communication between the board of directors and corporate operations.