- X FIFO Perpetual Inventory Record Date Quantity Unit Cost Total Cost Sep. 6 3 960 2,880 17 960 NN 1,920 1,800 17 900 Total 7 6,600 Print Done Moving-Weighted-Average Cost Perpetual Inventory Record Date Quantity Unit Cost Total Cost Sep. 6 3 960.00 2,880 1,920 4 17 907.50 Total 6,510 Print Done Gross margin under FIFO is $ Gross margin under weighted average-cost is $ The Wonderful World of Music carries a large inventory of guitars and other musical instruments. The store uses a perpetual inventory system. Company records indicate the following for a particular line of guitars. Date Item Quantity Unit Cost Sep. 1 Balance 5 $960 6 Sale 3 8 Purchase 14 900 17 Sale 4 30 Purchase 9 900 The moving-weighted average-cost method produces a lower cost of goods sold (and therefore a higher gross margin) because unit inventory costs are decreasing in this scenario. While FIFO counts the earlier inventory first, the moving-weighted-average-cost method uses all inventory on hand in determining the cost of goods sold. The sale price of each guitar was $1,720. (Click the icon to view the cost of goods sold calculation from the FIFO perpetual inventory record.) (Click the icon to view the cost of goods sold calculation from the moving-weighted-average-cost perpetual inventory record.) Required Calculate the gross margin for The Wonderful World of Music Store under both the FIFO and the moving-weighted average-cost methods. Explain why the gross margin is higher under the moving-weighted average-cost method. Enter your answer in each of the answer boxes