Refer to the information in Problem 6-3B and assume the periodic inventory system is used.

Data From Problem 6-3B

Aloha Company uses a perpetual inventory system. It entered into the following calendar-year purchases  and sales transactions. (For specific identification, units sold consist of 80 units from beginning inventory,  300 units from the May 6 purchase, and 100 units from the May 25 purchase.)

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) weighted average, and (d) specific identification. (Round all amounts to cents.)
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 percentage of gross profit, which method of inventory costing will the manager likely prefer?

Transcribed Image Text:

Date Activities Units Acquired at Cost Units Sold at Retail May 1 May 6 Beginning inventory .... 150 units @ $300 per unit Purchase .... 350 units @ $350 per unit May 9 Sales.... 180 units @ $1,200 per unit May 17 Purchase 80 units @ $450 per unit May 25 Purchase 100 units @ $458 per unit May 30 Sales... 300 units @ $1,400 per unit Total . 680 units 480 units