A retail chain uses the weighted average cost method for inventory valuation. Beginning inventory consisted of 5,000 units at $10/unit. During the period, the company purchased 10,000 units at $12/unit. Ending inventory consists of 3,000 units.

• Requirements:
  • Calculate the cost of goods sold (COGS) and ending inventory value using the weighted average cost method.
  • Determine the gross profit and gross profit margin for the period.
  • Discuss the advantages and disadvantages of the weighted average cost method compared to other inventory valuation methods.
  • Recommend inventory management strategies based on the COGS calculation.
  • Analyze the impact of inventory valuation methods on financial statements and tax liabilities.