1. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 260 from the February 10 purchase, 150 from the March 13 purchase, 150 from the August 21 purchase, and 385 from the September 5 purchase.

2. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)

3. The companys manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager?

• Specific Identification

• FIFO

• Weighted Average

• LIFO

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions Units Sold at Retail Units Acquired at Cost 570 units @ $50 per unit 380 units @ $47 per unit 190 units @ $35 per unit Date Activities Jan. 1 Beginning inventory Feb. 10 Purchase Mar. 13 Purchase Mar. 15 Sales Aug. 21 Purchase Sept. 5 Purchase Sept. 10 Sales Totals 700 units @ $75 per unit 200 units @ $55 per unit 590 units @ $53 per unit 790 units @ $75 per unit 1,490 units 1,930 units Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions Units Sold at Retail Units Acquired at Cost 570 units @ $50 per unit 380 units @ $47 per unit 190 units @ $35 per unit Date Activities Jan. 1 Beginning inventory Feb. 10 Purchase Mar. 13 Purchase Mar. 15 Sales Aug. 21 Purchase Sept. 5 Purchase Sept. 10 Sales Totals 700 units @ $75 per unit 200 units @ $55 per unit 590 units @ $53 per unit 790 units @ $75 per unit 1,490 units 1,930 units