Problem 6-3A Perpetual: Alternative cost flows LO P1

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

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

560

units

@ $55 per unit

Feb.

10

Purchase

440

units

@ $52 per unit

Mar.

13

Purchase

140

units

@ $40 per unit

Mar.

15

Sales

710

units

@ $85 per unit

Aug.

21

Purchase

180

units

@ $60 per unit

Sept.

5

Purchase

540

units

@ $57 per unit

Sept.

10

Sales

720

units

@ $85 per unit

Totals

1,860

units

1,430

units

Required: 1. Compute cost of goods available for sale and the number of units available for sale.

2. Compute the number of units in ending inventory. 3. 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 560 units from beginning inventory, 340 from the February 10 purchase, 140 from the March 13 purchase, 130 from the August 21 purchase, and 260 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.) 4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)