Activity 2 Question 1 A company reports the following beginning inventory and purchases, sales for the month of April. Units Unit Cost Beginning inventory on April 1 1,000 $2.80 Purchase on April 2 2,000 $3.00 Purchase on April 15 6,000 $3.30 Sold 4,000 units @ $4.00 on April 19 Purchase on April 30 2,000 $3.50 Required (a) What is the cost of the units that remain in ending inventory and the cost of goods sold at April 30 based on a perpetual inventory system using: (i) FIFO (ii) Weighted average cost. (iii) Specific identification if the ending inventory consists of 2,000 units from April 30 purchase, 4,500 units from April 15 purchase, 200 units from April 2 purchase and the balance from beginning inventory. (b) Using the information from (a)(i) and (ii), (i) Explain which method will give lower COGS. (ii) Explain which method will give a higher gross profit

(iii) Explain which method will give a higher ending inventory value.