Use the data in Exercise 6-3 to compute gross profit for the month of January for Laker Company similar to that in Exhibit 6.8 for the four inventory methods.

1. Which method yields the highest gross profit?
2. Does gross profit using weighted average fall above, between, or below that using FIFO and LIFO?
3. If costs were rising instead of falling, which method would yield the highest gross profit?

Data From Exercise 6-3

Laker Company reported the following January purchases and sales data for its only product.

Exhibit 6.8

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Date Activities Units Acquired at Cost Units Sold at Retail Beginning inventory.... 140 units @ $6.00 = $ 840 Jan. 1 Jan. 10 Sales ... 100 units @ $15 Jan. 20 Purchase... 60 units @ $5.00 = 300 Jan. 25 Sales .... 80 units @ $15 Jan. 30 Purchase.... 180 units @ $4.50 = 810 Totals ... 380 units $1,950 180 units