The following accounting information pertains to Mobile and Casper companies. The only difference between the two companies is that Mobile uses FIFO, while Casper uses LIFO.

Required
a. Compute the gross margin percentage for each company and identify the company that appears to be charging the higher prices in relation to its cost.
b. For each company, compute the inventory turnover ratio and the average days to sell inventory. Identify the company that appears to be incurring the higher financing cost.
c. Explain why a company with the lower gross margin percentage needs to have a higher inventory turnover ratio assuming a period of inflation.

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Mobile Co. $ 70,000 Casper Co. Cash Accounts receivable Merchandise inventory Accounts payable Cost of goods sold Building Sales $ 70,000 230,000 230,000 220,000 210,000 1,350,000 210,000 1,380,000 1,800,000 1,800,000