Mandela Company's first year in operation was 2013. The following inventory information comes from Mandela's accounting records for the year. 
During the year, Mandela sold 350 units for $240 each. Operating expenses for the year were $15,000, and the tax rate was 30%.
Required:
a) Calculate the cost of goods sold by LIFO and by FIFO.
b) What amount of income tax would Mandela have to pay if it uses LIFO? If it uses FIFO?
c) Assuming that the results for 2013 are representative of what Mandela can generally expect, would you recommend that the company use LIFO or FIFO? Explain.
Definitions:
Absenteeism
Absenteeism is the frequent absence from work or other obligations without valid reasons, affecting productivity and efficiency.
Gain-Sharing Plans
Incentive plans that reward employees for contributing to a company's increased productivity or profitability.
Current Distribution
The process or manner by which resources, earnings, or assets are apportioned at the present time.
Cash Plan
A type of health insurance plan that covers everyday medical expenses and provides cash payments for specified conditions or treatment.
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