this section introduces inventory cost flow assumptions.for this purpose, assume that three identical units are purchased separately at the following three dates and costs: may 1 at $ 45, may 3 at $65, and may 6 at $70. one unit is then sold on may 7 for $100. exhibit 6.2 gives a visual layout of the flow of costs to either the gross profit section of the income statement or the inventory reported on the balance sheet for fifo,lifo,and weighted average.