Question

Marlow Company uses a perpetual inventory system. It entered into the following calendar-year 2011 purchases and sales transactions.
Required
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) specific identification—ending inventory consists of 95 units from beginning inventory, 175 from the February 10 purchase, 70 from the March 13 purchase, and 455 from the September 5 purchase, and (d) weighted average. (Round per unit costs to three decimals, but inventory balances to the dollar.)
4. Compute gross profit earned by the company for each of the four costing methods in part 3.
Analysis Component
5. If the company’s manager earns a bonus based on a percent of gross profit, which method of inventory costing will the manager likely prefer?


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  • CreatedMarch 18, 2015
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