The Habicht Company was formed in 2009 to produce a single product. The production and sales for the next four years were as follows:

Required
1. Determine the gross profit for each year under each of the following periodic inventory methods:
a. FIFO
b. LIFO
c. Average cost (round unit costs to 3 decimal places)
2. Explain whether the company’s return on assets (net income divided by average total assets, as we discussed in Chapter 6) would be higher under FIFO orLIFO.

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Production Units Total Costs Unts Sales Revenue Units in Ending Inventory Sales 2009 100,000 $200,000 80,000 $400,000 2010 120,000 234,000 110,000 550,000 2011 130,000 247,000 150,000 750,000 2012 130,000 240,500 120,000 600,000 20,000 30,000 10,000 20,000