Johnson Company Reports the Following for the Month of June

question 8

Essay

Johnson Company reports the following for the month of June. (a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO, (2) LIFO, and (3) average cost.
(b) Which costing method gives the highest ending inventory? The highest cost of goods sold? Why?
(c) How do the average-cost values for ending inventory and cost of goods sold relate to ending inventory and cost of goods sold for FIFO and LIFO?

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Definitions:

Psychosomatic

Referring to physical symptoms that are caused or significantly influenced by psychological factors, such as stress or anxiety.

Somat

Pertains to the body, especially as distinct from the mind or personality.

Psychosis

A mental disorder characterized by a disconnect from reality, which may include hallucinations, delusions, and impaired thought processes.

Delusions

False beliefs held with strong conviction, despite superior evidence to the contrary, often indicative of a psychological disorder.