Muggle Inc. sells high-end brooms at a retail price of $450 each. These specialty brooms magically sweep by themselves. Below is the opening inventory data for Muggle Inc. on January 1 20x9:

Date # of Units Balance

Jan 1, 2x9 2,000 $480,000

During 20x9, Muggle made the following purchases of brooms:

Date # of Units Cost/Unit Total Cost

March 31 5,000 $250 $1,250,000

July 15 5,000 $260 $1,300,000

Nov 1 4,000 $290 $1,160,000

Having found a real niche market, the brooms flew off the shelves during the year, and total units sold were 14,750!

Muggle Inc. uses a periodic inventory system.

Required

What would their gross profit for 20x9 be for the year ended December 31, 20x9 if:

a) They use the FIFO inventory method. (6 marks)

b) They use Weighted Average inventory method. (3 marks)