Welch Company accounts for a product it sells using the LIFO periodic inventory procedure. Merchandise inventory on January 1 was 3,000 units at $14.40 each. Product data for the year ended December 31, 2019, are as follows:

a.Compute the gross margin earned on sales of this product for 2019.

b.Repeat parta, assuming that the December 26 purchase was made in January of 2020.

c.Recompute the gross margin, assuming that 10,000 rather than 6,000 units were purchased on December 26 at the same cost per unit.

d.Solve partsa,b, andcusing the FIFO method.

Purchases Sales Unit Unit Cost Unit Unit Cost January 5 6,000 a $9.00 January 10 4,000 a $14.40 March 31 18,000 10.80 April 2 15,000 16.20 August 12 12,000 13.50 August 22 16,000 18.00 December 26 6,000 @ 14.40 December 24 3,000 @ 19.80