Assume that Toyland store bought and sold a line of dolls during December as follows:

Dec. 1 Beginning merchandise inventory ... 11 units @ $ 8 each

8 Sale ................... 6 units @ $ 21 each

14 Purchase ............... 17 units @$15 each

21 Sale ................... 15 units @ $ 21 each

Requirements

1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.

2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.

3. Which method results in a higher cost of goods sold?

4. Which method results in a higher cost of ending merchandise inventory?

5. Which method results in a higher gross profit?