E$6\mathrm{.}5($LO $2,3)($Apply perpetual FIFO.$)$ Ohsweken Outdoor Stores Inc. uses a perpetual

inventory system and has a beginning inventory, as at April $1,$ of $150$ tents. This consists of $50$

tents purchased in February at a cost of $$210$ each and $100$ tents purchased in March at a cost

of $$225$ each. During April, the company had the following purchases and sales of tents:

Instructions

a$.$ Determine the cost of goods sold and the cost of the ending inventory using FIFO.

b$.$ Calculate Ohsweken Outdoors's gross profit and gross profit margin for the month of

April.

c$.$ Is the gross profit determined in part $($b$)$ higher or lower than it would be if Ohsweken

Outdoors had used the average cost formula? Explain.