Question

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Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

130

units

@ $51.60 per unit

Mar.

5

Purchase

240

units

@ $56.60 per unit

Mar.

9

Sales

290

units

@ $86.60 per unit

Mar.

18

Purchase

100

units

@ $61.60 per unit

Mar.

25

Purchase

180

units

@ $63.60 per unit

Mar.

29

Sales

160

units

@ $96.60 per unit

Totals

650

units

450

units

Required:
1. Compute cost of goods available for sale and the number of units available for sale.

Cost of Goods Available for Sale Cost per Unit Cost of Goods Available for Sale # of units 13051. S Beginning inventory Purchases: 6,708 March 5 March 18 March 25 240 100 180 650 56.60 61.60 63.60 13,584 6,160 11,448 37,900 Total

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. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 210 units from the March 5 purchase; the March 29 sale consisted of 60 units from the March 18 purchase and 100 units from the March 25 purchase.

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 210 units from the March 5 purchase; the March 29 sale consisted of 60 units from the March 18 purchase and 100 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Answer 1