Saddlery Company sells leather saddles and equipment for horse enthusiasts. Saddlery uses the perpetual inventory system. The following schedule relates to the company’s inventory for the month of May:

Required
a. Calculate Saddlery Company’s cost of goods sold, gross margin, and ending inventory using:

i. FIFO

ii. weighted-average. Round per unit cost to two decimal places.

b. Which cost formula produced the higher gross margin?

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Cost Sales Beginning inventory $ 75,000 150 units 100 units 50 units 200 units 200 units 50 units 75 units May 1 5 $ 65,000 Sale Purchase 9. $ 27,500 $120,000 13 24 Purchase Sale $140,000 $ 40,000 27 30 Sale $ 49,500 Purchase