Mimotopes Company began operations in 2014 by selling a single product. Data on purchases and sales for the first four months were as follows:

On August 6, 2014, the president of the company, Mohammad Zanelli, asked for your advice on costing the 34,000-unit physical inventory that was taken on July 31, 2014. Moreover, because the firm plans to expand its product line, he asked for your advice on the use of a perpetual inventory system in the future.
1. Determine the cost of the July 31, 2014, inventory under the periodic system, using the (a) first-in, first-out method and (b) average cost method.
2. Determine the gross profit for the year under both of the methods in (1).
3. Which of the inventory costing methods better reflects the movement of the inventory?

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Purchases: Date Units Purchased 15,500 16,500 20,DOD 20,00D 72,DOD Unit Cost Total Cost April 6 May 18 June 6 July 10 $12.20 13.00 13.20 14.00 $189,100 214,500 264,000 28D,DO0 $947,600 Sales: April May June July Total units Total sales 8,000 units 8,00D 10,00D $608,DOD