Aloha Company uses a perpetual inventory system. It entered into the following calendar year 2013 purchases and sales transactions. (For specific identification, the May 9 sale consisted of 80 units from beginning inventory and 100 units from the May 6 purchase; the May 30 sale consisted of 200 units from the May 6 purchase and 100 units from the May 25 purchase.)
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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,
(d) Specific identification. (Round all amounts to dollars and 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 percent of gross profit, which method of inventory costing will the manager likelyprefer?