Problem 6-64A Inventory Costing Methods Gavotte Products uses a perpetual inventory system. For 2017 and 2018, Gavotte has the following data: Activity Units Purchase Price (per unit) Sale Price (per unit) 2017 Beginning inventory 200 Purchase 1, Feb. 15 300 Sale 1, Mar. 10 320 Purchase 2, Sept. 15 500 Sale 2, Nov. 3 550 Purchase 3, Dec. 20 150 2018 200 Sale 3, Apr. 4 Purchase 4, June 25 Sale 4, Dec. 18 200 150 Required: 1. For each year, compute cost of goods sold, the cost of ending inventory, and gross margin using FIFO. 2017 2018 Cost of goods sold Cost of ending inventory $ $ $ 9,540 3,510 12,210 $ $ $ 4,490 1,820 4,260 V Gross margin 2. For each year, compute cost of goods sold, the cost of ending inventory, and gross margin using the weighted average cost method. (Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar) Cost of goods sold $ 2017 $ 9,602 $ 3,177 $ 12,148 2018 4,358 X 1,619 x 4,392 x Cost of ending inventory x Gross margin $ 3. CONCEPTUAL CONNECTION: Which method would result in the lowest amount paid for taxes? Weighted average cost 4. CONCEPTUAL CONNECTION: Which method produces the most realistic amount for income? For Inventory? For Income Weighted average cost For inventory FIFO Explain your answer. The input in the box below will not be automatically graded, but may be reviewed and considered by your instructor, 5. CONCEPTUAL CONNECTION: Compute Gavotte's gross profit ratio and Inventory turnover ratio under both inventory costing methods. (Note: Round answers to two decimal places.) FIFO Method Average Cost Method 2017 2018 2017 2018 Gross profit ratio 56.14 % 48.69 % 55.85 % 50.19 X % Inventory turnover 3.59 1.68 3.86 x 1.82 x How would the choice of inventory costing method affect these ratios