Instructions

question 4

Essay

Instructions
(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and (2) LIFO.
(b) Compute the cost of the ending inventory and the cost of goods sold using the average-cost method.

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Definitions:

Fire Sale

A sale of goods at extremely discounted prices, typically due to the seller's urgent need to dispose of these items quickly.

Demand Uncertainty

Refers to the unpredictable nature and variability of customer demand for products or services, making it challenging to plan effectively.

Product Availability

Refers to the extent to which goods or services can be bought from a company at any given time.

Cost of Stocking Out

The financial loss and potential customer dissatisfaction resulting from insufficient inventory to meet demand.