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ontoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales...

ontoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Date Activities Units Acquired at Cost Units Sold at Retail
Jan. 1 Beginning inventory 620 units @ $45 per unit
Feb. 10 Purchase 380 units @ $42 per unit
Mar. 13 Purchase 100 units @ $30 per unit
Mar. 15 Sales 735 units @ $70 per unit
Aug. 21 Purchase 170 units @ $50 per unit
Sept. 5 Purchase 400 units @ $46 per unit
Sept. 10 Sales 570 units @ $70 per unit
Totals 1,670 units 1,305 units


Required:
1. Compute cost of goods available for sale and the number of 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. For specific identification, units sold consist of 620 units from beginning inventory, 280 from the February 10 purchase, 100 from the March 13 purchase, 120 from the August 21 purchase, and 185 from the September 5 purchase.



4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)



5. The company’s manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager?

  • Weighted Average

  • FIFO

  • Specific Identification

  • LIFO

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Answer #1

Coorg good amitable for sale - and feblo - Hall3 620x 45 - 280 × 42 100x & 30 - Hox 450 - 4000 $46 427,900 $18,960 8,000 8.50b) LPPO Ending inventay - 365x845 = $16,425 c) weighted Average Jan 1 - 620 - $271900 klo 10- 300 - $15,960 Map/3 - 100 - 200(4) Guoss pucten a) FIFO coas = Available for sale - = $73,760 - $ 16,790 $ 56,970 - Sales nevenue 735x170 570x & 70 - - $51,(b) LAPO COCIS - $ +3,760 - $16,425 - $57,335 Guon puotit = $91350-$57,335 - $34,015 (C) weighted Average Coces = $73,760 - $

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