Spice Inc. began October 2020 with 100 shirts that cost \(\$ 76\) each. During October, the store made the following purchases at cost:

Spice sold 500 shirts ( 320 shirts on October 18 and 180 shirts on October 28) and ended October with 130 shirts. The sale price of each shirt was \(\$ 130\).
{Requirements}
1. Determine the cost of goods sold and ending inventory amounts by the weighted-averagecost and FIFO cost methods assuming the perpetual system is used. Round weighted-average cost per unit to three decimal places, and round all other amounts to the nearest dollar.
2. Explain why cost of goods sold is highest under weighted-average cost. Be specific.
3. Prepare Spice's income statement for October 2020. Report gross profit. Operating expenses totalled \(\$ 10,000\). Spice uses the weighted-average-cost method for inventory. The income tax rate is \(23 \%\).

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Oct. 3 12 200 @ $81 = $16,200 223 90 @ 82 = 7,380 24 240 @ 85 = 20,400