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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

230

units

@ $53.60 per unit

Mar.

5

Purchase

290

units

@ $58.60 per unit

Mar.

9

Sales

390

units

@ $88.60 per unit

Mar.

18

Purchase

150

units

@ $63.60 per unit

Mar.

25

Purchase

280

units

@ $65.60 per unit

Mar.

29

Sales

260

units

@ $98.60 per unit

Totals

950

units

650

units

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 130 units from beginning inventory and 260 units from the March 5 purchase; the March 29 sale consisted of 110 units from the March 18 purchase and 150 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Answer 1

Warner Woods FIFO Perpetual Purchase Per unit cost Total Cost Units Units Date Mar-01 Mar-05 Balance Per unit cost Total Cost 53.6 12328 53.6 12328 58.6 16994 58.6 7618 290 58.6 16994 Mar-09 230 12328 130 160 Cost of goods sold Per unit cost Total Cost Units 230 230 290 53.6 58.6 9376 130 150 130 150 280 58.6 7618 63.6 280 Mar-18 150 63.6 9540 Mar-25 280 65.6 18368 58.6 63.6 58.6 63.6 65.6 63.6 65.6 63.6 65.6 Ending 7618 9540 7618 9540 18368 1272 18368 1272 18368 Mar-29 130 130 8268 Mar-31 280 Purchases 44902 COGS 37590 19640 LIFO Perpetual Purchase Per unit cost Total Cost Cost of goods sold Units Per unit cost Total Cost Units Date Mar-01 Mar-05 Units 230 290 Balance Per unit cost 53.6 53.6 58.6 53.6 58.6 16994 230 Total Cost 12328 12328 16994 6968 290 Mar-09 130 290 100 58.6 53.6 16994 5360 Mar-18 150 63.6 9540 Mar-25 280 65.6 18368 Mar-29 260 66 17056 130 150 130 150 280 130 150 20 130 150 20 53.6 63.6 53.6 63.6 66 53.6 63.6 65.6 53.6 63.6 65.6 Ending 6968 9540 6968 9540 18368 6968 9540 1312 6968 9540 1312 17820 Mar-31 Purchases 44902 COGS 39410

Weighted Average Perpetual Purchase Date Units Per unit cost Total Cost Units Mar-01 Mar-05 290 58.6 16994 Cost of goods sold Per unit cost Total Cost Units 230 230 290 520 56.392 1992 130 390 Mar-09 Mar-18 150 63.6 9540 130 Balance Per unit cost Total Cost 53.6 12328 53.6 12328 58.6 16994 56.39 29322 56.39 7331 56.39 7331 63.6 9540 60.25 16871 60.25 16871 65.6 18368 62.93 35239 62.93 18878 62.93 18878 Ending 18878 150 280 280 Mar-25 280 65.6 18368 280 260 62.93 16361 Mar-29 Mar-31 560 300 300 Purchases 44902 COGS 38352 Specific Identification Purchase Date Units Per unit cost Total Cost Units Mar-01 Mar-05 290 58.6 16994 Cost of goods sold Per unit cost Total Cost Units 230 230 290 53.6 6968 100 58.6 15236 30 100 Mar-09 130 260 Mar-18 150 63.6 9540 150 Mar-25 280 65.6 18368 100 30 150 280 100 30 40 Balance Per unit cost Total Cost 53.6 12328 53.6 12328 58.6 16994 53.6 5360 58.6 1758 53.6 5360 58.6 1758 63.6 9540 53.6 5360 58.6 1758 63.6 9540 65.6 18368 53.6 5360 58.6 1758 63.6 2544 65.6 8528 53.6 5360 58.6 1758 63.6 2544 65.6 8528 Ending 18190 Mar-29 110 150 63.6 65.6 6996 9840 Mar-31 100 30 40 130 Purchases 44902 COGS 39040

Gross Margin Sales Less:COGS Gross Profit FIFO 60190 -37590 22600 LIFO 60190 -39410 20780 Avg. Cost 60190 -38352 21838 Spec. ID 60190 -39040 21150 Cost of goods available for sales and number of units available for use Cost of goods # of units Cost per unit available for sale 53.6 12328 Beginning Inv. Purchases: Mar-05 Mar-18 Mar-25 Total 290 150 280 950 58.6 63.6 65.6 16994 9540 18368 57230