Exercise $6-7^A$

Periodic: Gross profit effects of inventory methods

P$3$ A$1$

Use the data and results from Exercise $6-66^A$ to compute gross profit for the month of January for the company similar to that in Exhibit $6\mathrm{.}8$ for the four inventory methods.

Required

Which method yields the highest gross profit?

Does gross profit using weighted average fall above, between, or below that using FIFO and LIFO?

If costs were rising instead of falling, which method would yield the highest gross profit?

Refer to the information in Exercise $6-3$ and assume the periodic inventory system is used. Determine the costs assigned to ending inventory and to cost of goods sold using $($a$)$ specific identification, $(b)$ weighted average, $($c$)$ FIFO, and $($d$)$ LIFO. $($Round per unit costs and inventory amounts to cents.$)$ For specific identification, ending inventory consists of $180$ units from the January $30$ purchase, $5$ units from the January $20$ purchase, and $15$ units from beginning inventory.

Exercise $6-6{?}^A$

Periodic: Inventory costing

P$3$

Exercise $6-7{?}^A$

Periodic: Gross profit effects of inventory methods

Use the data and results from Exercise $6-6^A$ to compute gross profit for the month of January for the company similar to that in Exhibit $6\mathrm{.}8$ for the four inventory methods.

Required

Which method yields the highest gross profit?

Does gross profit using weighted average fall above, between, or below that using FIFO and LIFO?

If costs were rising instead of falling, which method would yield the highest gross profit?