Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions.

DateActivitiesUnits Acquired at CostUnits Sold at RetailJanuary 1Beginning inventory660units@ $60 per unit February 10Purchase330units@ $57 per unit March 13Purchase110units@ $45 per unit March 15Sales 715units@ $70 per unitAugust 21Purchase160units@ $65 per unit September 5Purchase570units@ $61 per unit September 10Sales 730units@ $70 per unit Totals1,830units 1,445units

Required:

Compute cost of goods available for sale and the number of units available for sale.

Compute the number of units in ending inventory.

Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (For specific identification, units sold consist of 660 units from beginning inventory, 230 from the February 10 purchase, 110 from the March 13 purchase, 110 from the August 21 purchase, and 335 from the September 5 purchase.)

Compute gross profit earned by the company for each of the four costing methods.

Note: Round your average cost per unit to 2 decimal places.

The companys manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager?

1. multiple choice

LIFO

Weighted Average

Specific Identification

FIFO