Montoure Company uses a perpetual inventory system. It entered into the following calender-year 2015 purchases and sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from the febuary 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.)
Date Activities Units Acquired at Cost Units Sold at Retail
Jan 1 Beginning inventory............................... 600 units @ $45.00 per unit
Feb 10 Purchase............................................... 400 units @ $42.00 per unit
Mar 13 Purchase............................................... 200 units @ $27.00 per unit
Mar 15 Sales..................................................... 800 units @ $75.00 per unit
Aug 21 Purchase.............................................. 100 units @ $50.00 per unit
Sept 5 Purchase.............................................. 500 units @ $46.00 per unit
Sept 10 Sales.................................................... 600 units @ $75.00 per unit
Totals................................................... 1800 units 1400 units
Required
1. Compute cost of goods available for sale and the number units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO, (b)LIFO, (c) weighted average, and (d) specific identification. (Round all amounts to cents.)
4. Compute gross profit earned by the company for each of the four costing method of in part 3.
Analysis Component
If the company's manager earns a bonus based on a percent of gross profit, which method of inventory costing will the manager likely prefer?
Check (3) Ending inventory; FIFO, $18400, LIFO, $18000, WA, $17760 (4) LIFO gross profit, $45800