Speed World Cycles sells high$-$performance motorcycles and motocross racers. One of Speed World$$s most popular models is the Kazomma $900$ dirt bike. During the current year, Speed World Cycles purchased eight of these bikes at the following costs:

Purchase Date Units Purchased Unit Cost Total Cost

July $12$ $ $4,950$ $ $9,900$

July $2235,00015,000$

August $335,10015,300$

$8$ $ $40,200$

On July $28,$ Speed World Cycles sold four Kazomma $900$ dirt bikes to the Vince Wilson racing team. The remaining four bikes remained in inventory at September $30,$ the end of Speed World$$s fiscal year.

Assume that Speed World Cycles uses a perpetual inventory system.

Required:

a$-1.$ Compute the cost of goods sold relating to the sale on July $28$ and the ending inventory of Kazomma $900$ dirt bikes at September $30,$ using Average cost.

a$-2.$ Compute the cost of goods sold relating to the sale on July $28$ and the ending inventory of Kazomma $900$ dirt bikes at September $30,$ using FIFO method.

a$-3.$ Compute the cost of goods sold relating to the sale on July $28$ and the ending inventory of Kazomma $900$ dirt bikes at September $30,$ using LIFO method.

b$-1.$ Which of the three cost flow assumptions will result in Speed World Cycles reporting the highest net income for the current year?

b$-2.$ Which of the three cost flow assumptions minimizes the income taxes owed by Speed World Cycles for the year?

b$-3.$ May Speed World Cycles use the cost flow assumption that results in the highest net income for the current year in its financial statements, but use the cost flow assumption that minimizes taxable income for the current year in its income tax return?