A company uses a perpetual inventory system. It entered into the following pruch

Question

A company uses a perpetual inventory system. It entered into the following pruchases and sales transactions for March.

Date Activities Units Acquired at Cost Units Sold at Retail

Mar. 1 Beginning Inventory 50 units @ $50/unit
Mar. 5 Purchase 200 units @ $55/unit
Mar. 9 Sales 210 units @ $85/unit
Mar. 18 Purchase 60 units @ $60/unit
Mar. 25 Purchase 100 units @ $62/unit
Mar. 29 Sales 80 units @ $95/unit

Total 410 units 290 units


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.
4. Compute gross profit earned by the company for each of the four costing methods in part 3.

Check: (3) ending inventory: FIFO $7400; LIFO$6840; WA $7176
(4) LIFO gross profit $8990

Explanation / Answer

11,800 correct, 8,990 Weighted average 9,790

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