. Heavy Equipment and Machinery Inc. (HEMI) Inventory 1. HEMI has a perpetual inventory system with purchases and sales being recorded by its computerized inventory system using the weighted average cost method. HEMI has purchased and placed heavy equipment transmissions at Suncor in Fort McMurray on consignment. Suncor benefits from having the spare part readily available and HEMI saves on storage costs. Accountant has been asked by HEMI's management to provide a profitability report for the consignment arrangement with Suncor. The Accountant extracted the sales ($20,500,000) and cost of sales ($18,504,180) numbers from HEMI's accounting system. The Accountant wants you to: a. Compute the gross profit using the first-in-first out (FIFO) method of costing inventory and the following purchase and sale information (show your calculations): Date Activity Units Total Cost Total Sales Revenues December 1 Purchase 15 $6,000,000 December 10 Purchase 16 7,200,000 December 11 Sale (Used by Suncor) (20) $8,500,000 December 15 Purchase 16 8,800,000 December 20 Sale (Used by Suncor) (20) 12,000,000 b. Explain why the gross profit is higher under one method when compared to the other method