Montoure Company uses a perpetual inventory system. It entered into the following calendar-year 2008 purchases and sales transactions.

Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory . . . . . . . . . 600 units @ $45/unit Feb. 10 Purchase . . . . . . . . . . . . . . . . 350 units @ $42/unit Mar. 13 Purchase . . . . . . . . . . . . . . . . 200 units @ $29/unit Mar. 15 Sales . . . . . . . . . . . . . . . . . . . 600 units @ $75/unit Aug. 21 Purchase . . . . . . . . . . . . . . . . 150 units @ $50/unit Sept. 5 Purchase . . . . . . . . . . . . . . . . 545 units @ $46/unit Sept. 10 Sales . . . . . . . . . . . . . . . . . . . 650 units @ $75/unit Totals . . . . . . . . . . . . . . . . . . . 1,845 units 1,250 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) specific identification—
units sold consist of 500 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 200 from the September 5 purchase, and (d ) weighted average—round per unit costs to tenth of a cent and inventory balances to the dollar.
4 Compute gross profit earned by the company for each of the four costing methods in part 3.

Analysis Component 5 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?