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Question - Perpetual: Alternative cost flows
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
Date
Activities
Units Acquired at Cost
Units Sold at Retail
Mar. 1
Beginning inventory
80 units @ $50.60 per unit
Mar. 5
Purchase
215 units @ $55.60 per unit
Mar. 9
Sales
240 units @ $85.60 per unit
Mar. 18
75 units @ $60.60 per unit
Mar. 25
130 units @ $62.60 per unit
Mar. 29
110 units @ $95.60 per unit
Totals
500 units
350 units
Required - Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 55 units from beginning inventory and 185 units from the March 5 purchase; the March 29 sale consisted of 35 units from the March 18 purchase and 75 units from the March 25 purchase.
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