Topanga Group began operations early in 2018. Inventory purchase information for the quarter ended March 31, 2018, for Topangas only product is provided below. The unit costs include the cost of freight. The company uses a periodic inventory system.

Date of Purchase	Units		Unit Cost			Total Cost
Jan. 7	5,000		$	3.00			$	15,000
Feb. 16	26,000			4.00				104,000
March 22	30,000			5.00				150,000
Totals	61,000							269,000

Sales for the quarter, all at $8 per unit, totaled 37,000 units leaving 24,000 units on hand at the end of the quarter. Required: 1. Calculate Topanga's cost of goods sold for the first quarter using:

1. FIFO
2. LIFO
3. Average cost

2. Calculate Toponga's gross profit ratio for the first quarter using FIFO, LIFO, and Average cost. 3. Comment on the relative effect of each of the three inventory methods on the gross profit ratio.

Topanga Group began operations early in 2018. Inventory purchase information for the quarter ended March 31, 2018, for Topangas only product is provided below. The unit costs include the cost of freight. The company uses a periodic inventory system.

Date of Purchase	Units		Unit Cost			Total Cost
Jan. 7	5,000		$	3.00			$	15,000
Feb. 16	26,000			4.00				104,000
March 22	30,000			5.00				150,000
Totals	61,000							269,000

Sales for the quarter, all at $8 per unit, totaled 37,000 units leaving 24,000 units on hand at the end of the quarter. Required: 1. Calculate Topanga's cost of goods sold for the first quarter using:

1. FIFO
2. LIFO
3. Average cost

2. Calculate Toponga's gross profit ratio for the first quarter using FIFO, LIFO, and Average cost. 3. Comment on the relative effect of each of the three inventory methods on the gross profit ratio.