Refer to the information in Problem 6-3B and assume the periodic inventory system is used. 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. (Round all amounts to cents.) 4. Compute gross profit earned by the company for each of the four costing methods in part 3. Mahe Company uses a perpetual inventory system. It entered into the following calendar-vear purchases Problem 6-3B and sales transactions. (For specific identification, the May 9 sale consisted of 80 units from beginning/ Perpetual: Alternati inventory and 100 units from the May 6 purchase; the May 30 sale consisted of 200 units from the May 6 cost flows purchase and 100 units from the May 25 purchase.) Date Activities Units Acquired at Cost Units Sold at Retail 150 units @ $300.00 per unit 350 units @ $350.00 per unit 180 units @ $1,200.00 per unit May 1 May 6 May 9 May 17 May 25 May 30 Beginning inventory... Purchase. Sales .............. .... Purchase........... ... Purchase................ Sales ................. Total.............. 80 units @ $450.00 per unit 100 units @ $458.00 per unit 300 units @ $1,400.00 per unit 480 units 680 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. s. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO. (c) weighted average, and (d) specific identification. (Round all amounts to cents.) Compute gross profit earned by the company for each of the four costing methods in part 3. check (3) Ending invent FIFO $88,800LIFO. $62.500. WA $75,600 (4) LIFO gross $449.200 Analysis Component 5. If the company's the company's manager earns a bonus based on a percent of gross profit, which method of inventory costing will the manager likely prefer? Problem 6-4B0 Periodic System 1. Compute cost of goods available for sale and units available for sale Method: Beginning inventory May 6. May 17...... May 25..... Units available............. Cost of goods available for sale... 150 units @ $300 350 units @ $350 80 units @ $450 100 units @ $458 $ 45,000 122,500 36,000 45.800 $249.000 2. Units in ending inventory Units available (from part 1) Less: Units sold (180 + 300) Ending Inventory (units). 680 units 480 units 200 units Ending Inventory Cost of Goods Sold Periodic Inventory a FIFO $636,000 Sales Cost of Goods Sold Gross Profit "Sales (180 units x 1.200.000 units x $1.400) 3836,000
