Kettle Company made the following purchases of Product A in its first year of operations:

The ending inventory that year consisted of 2,400 units. Kettle uses periodic inventory procedure.

a. Compute the cost of the ending inventory using each of the following methods:
(1) FIFO, (2) LIFO, and (3) weighted-average.

b. Which method would yield the highest amount of gross margin? Explain why it does.

Transcribed Image Text:

Unit Units Cost January 2 1,400 @ $7.40 March 31 1,200 @ 7.00 July 5. 2,400 7.60 November 1 1,800 8.00