Topanga Group began operations early in 2021. Inventory purchase information for the quarter ended March 31, 2021, for Topangas only product is provided below. The unit costs include the cost of freight. The company uses a periodic inventory system to report inventory and cost of goods sold.

Date of Purchase	Units		Unit Cost			Total Cost
Jan. 7	6,000		$	2.00			$	12,000
Feb. 16	27,000			3.00				81,000
March 22	31,000			4.00				124,000
Totals	64,000						$	217,000

Sales for the quarter, all at $9 per unit, totaled 38,000 units leaving 26,000 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 Topanga'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.

Reg 1A Reg 1B Req 1C Reg 2 Req3 Calculate Topanga's cost of goods sold for the first quarter using FIFO. Cost of Goods Available for Sale FIFO: Cost per Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units # of units Cost per Cost of Cost per Ending sold unit Goods Sold in ending unit inventory Inventory # of units Cost of Goods Available for Sale unit Beginning Inventory Purchases: January 7 February 16 March 22 Total Reg 1A Req 1B > Req 1A Reg 1B Req 1C Req 2 Req3 Calculate Topanga's cost of goods sold for the first quarter using LIFO. Cost of Goods Sold - Periodic LIFO LIFO Cost of Goods Available for Sale Cost of Goods Available for unit Sale # of units Cost per # of units Cost per unit Ending Inventory - Periodic LIFO # of units in ending Cost per Ending unit inventory Inventory Cost of Goods Sold Sold Beginning Inventory Purchases: January 7 February 16 March 22 Total Req 1A Reg 1B Reg 1C Reg 2 Req3 Calculate Topanga's cost of goods sold for the first quarter using average cost. (Round average cost per unit to 4 decimal places.) Average Cost Cost of Goods Available for Sale Cost of Goods Unit # of units Available for Cost Sale Cost of Goods Sold - Average Cost Average # of units Cost per Cost of sold Unit Goods Sold Ending Inventory - Average Cost # of units Average in ending Cost per Ending inventory unit Inventory Beginning Inventory Purchases: January 7 February 16 March 22 Total Reg 1A Reg 1B Req 1C Reg 2 Reg 3 Calculate Topanga's gross profit ratio for the first quarter using FIFO, LIFO, and Average cost. Choose Numerator: - Choose Denominator: Gross Profit Ratio Gross profit ratio Il + FIFO LIFO Average cost + Req 1A Reg 1B Req 1C Reg 2 Reg 3 Comment on the relative effect of each of the three inventory methods on the gross profit ratio. In situations when costs are rising, LIFO results in a cost of goods sold and therefore, a gross profit ratio than FIFO.