Mei-ling is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goals for the next 11 months are to sell one mixer per month and to give two to three classes per week.

The cost of the fine European mixers is expected to increase. Mei-ling has just negotiated new terms with Kzinski that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination). Assume that Mei-ling has decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory.

The following transactions occur in February to May 2018.

Feb. 2 Mei-ling buys two deluxe mixers on account from Kzinski Supply Co. for NT$1,200 (NT$600 each), FOB destination, terms n/30.

16 She sells one deluxe mixer for NT$1,150 cash.

25 She pays the amount owed to Kzinski.

Mar. 2 She buys one deluxe mixer on account from Kzinski Supply Co. for NT$618, FOB destination, terms n/30.

30 Mei-ling sells two deluxe mixers for a total of NT$2,300 cash.

31 She pays the amount owed to Kzinski.

Apr. 1 She buys two deluxe mixers on account from Kzinski Supply Co. for NT$1,224 (NT$612 each), FOB destination, terms n/30.

13 She sells three deluxe mixers for a total of NT$3,450 cash.

30 Mei-ling pays the amounts owed to Kzinski.

May 4 She buys three deluxe mixers on account from Kzinski Supply Co. for NT$1,875 (NT$625 each), FOB destination, terms n/30.

27 She sells one deluxe mixer for NT$1,150 cash.

Instructions

(a) Determine the cost of goods available for sale. Recall from Chapter 5 that at the end of January, Cookie Creations had three mixers on hand at a cost of NT$595 each.

(b) (i) Calculate the ending inventory under the FIFO average cost, and LIFO methods.

(ii) Calculate the cost of goods sold under the FIFO, average cost, and LIFO methods.

(iii) Calculate the gross profit under the FIFO, average cost, and LIFOmethods.

(iv) Calculate the gross profit rate under the FIFO, average cost, and LIFO, methods.