Topanga Group began operations early in 2016. Inventory purchase information for the quarter ended March 31, 2016, for Topanga's only product is provided below. The unit costs include the cost of freight. The company uses a periodic inventory system.
|
Date of Purchase
|
Units
|
Unit Cost
|
Total Cost
|
|
Jan. 7
|
5.000
|
S4.00
|
20.000
|
|
Feb. 16
|
12.000
|
4.50
|
54.000
|
|
March 22
|
17,000
|
5.00
|
85,000
|
|
Totals
|
34,000
|
|
$159,000
|
Sales for the quarter, all at $7.00 per unit, totaled 20,000 units leaving 14,000 units on hand at the end of the quarter.
Required:
1- Calculate Topanga's gross profit ratio for the first quarter using the following inventory methods