. Mike's Beans had the following perpetual inventory records for September for a coffee maker:

September 1: Beginning inventory 45 units; $35 unit cost

September 6: Sold 30 units at a price of $55 each

September 8: Purchased 85 units at a cost of $40 each

September 17: Sold 40 units at a price of $55 each

September 30: Sold 50 units at a price of $55 each

Required:

A. Calculate ending inventory, cost of merchandise sold and gross profit using the FIFO method.

B. Calculate ending inventory, cost of merchandise sold and gross profit using the LIFO method.

C. Calculate ending inventory, cost of merchandise sold and gross profit using the average cost method.

D. Which inventory costing method provides the highest Cost of Merchandise Sold in a period of rising costs? Why?

E. Why do many firms prefer to use FIFO? Why do many firms prefer to use LIFO?