FIFO LIFO Gross Profit

[archived_user]

Units Unit Price
Beginning Inventory 709 $2.00
Purchases 556 $6.00
Sales 959 $13.00
What is gross profit using the FIFO method and LIFO method?
Explanation
FIFO COGS = (709 units)($2/unit) + (959 − 709)($6/unit) = $1,418 + $1,500 = $2,918
Sales = (959 units)($13/unit) = $12,467
Gross profit = Sales − COGS
= 12,467 − 2,918 = $9,549
LIFO COGS = (556 units)($6/unit) + (959 − 556)($2/unit) = $3,336 + $806 = $4,142
Sales = (959 units)($13/unit) = $12,467
Gross profit = Sales − COGS
= 12,467 − 4,142 = $8,325
My question: Where did they get “(959 − 709)($6/unit)” for FIFO COGS? And “(959 − 556)($2/unit)” for LIFO COGS? (specifically the price per unit part. Shouldn’t it be $2 and $6 for FIFO and LIFO?)

 

[archived_user]

FIFO: 709 units sold from beginning inventory (all of BE), 250 (= 959 − 709) units sold from purchases.
LIFO: 556 units sold from purchases (all of purchases),403 (= 959 − 556) units sold from beginning inventory.