Marak Corp. sold specialized office chairs. They purchase the chairs from the manufacturer as follows.

Beginning inventory. 1,000 units @ $60 each. ($60,000)

Purchases

5,000 units @ $100 each. ($500,000)

8,000 units @ $120 each. ($960,000)

9,000 units @ $150 each. (1,350,000)

This year the company sold 15,000 units. Sales price per unit is $240.

How many units remain in ending inventory?

1000 + 5000 + 8000 + 9000 = 23,000

23,000 -15,000 = 8,000 Unites

Assuming varying inventory methods, compute sales, gross profit, and ending inventory. For ending inventory, list each layer quantity and cost per unit. (ask if these instructions are confusing!) (21 points)

Sales Gross Profit Ending inventory

LIFO 3.6 mil 1.53 mil 1.2 mil

FIFO 3.6 mil 1.93 mil 800,000

Weighted average 3.6 mil 1.73 mil 1 mil

Provide four items Marak Corporation would consider when choosing its inventory method. (brevity is appreciated)

The next year the company experienced a supply chain problem and as such the company was unable to purchase additional inventory. At year end the ending inventory of chairs was only 1,000 units. Explain the effect of this on cost of goods sold priced using LIFO as opposed to FIFO? (you dont need to do calculations)