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Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

160

units

@ $52.20 per unit

Mar.

5

Purchase

255

units

@ $57.20 per unit

Mar.

9

Sales

320

units

@ $87.20 per unit

Mar.

18

Purchase

115

units

@ $62.20 per unit

Mar.

25

Purchase

210

units

@ $64.20 per unit

Mar.

29

Sales

190

units

@ $97.20 per unit

Totals

740

units

510

units

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 95 units from beginning inventory and 225 units from the March 5 purchase; the March 29 sale consisted of 75 units from the March 18 purchase and 115 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Gross Margin	FIFO	LIFO	Avg. Cost	Spec. ID
Sales	$46,372	$46,372	$46,372	$46,372
Less: Cost of goods sold
Gross profit

Answer 1

Ans. 4			FIFO	LIFO	Weighted average	Specific identification
	Sales	$46,372	$46,372	$46,372	$46,372
	(-) Cost of goods sold	-$28,847	-$30,177	-$29,397	-$29,877
	Gross margin	$17,525	$16,195	$16,975	$16,495
	*Calculation of sales:
	Date	Units	Rate	Total
	9-Mar	320	$87.20	$27,904
	29-Mar	190	$97.20	$18,468
	Total sales			$46,372
	CALCULATIONS:

Ending inventory units = Total units available - Total units sold
Purchase date	Units available (a)	Sold units (b)	Ending inventory (a-b)
1-Mar	160	95	65
5-Mar	255	225	30
18-Mar	115	75	40
25-Mar	210	115	95