You are provided with the following information for Najera Inc. for the month ended June 30, 2019. Najera uses the periodic method for inventory.

You are provided with the following information for Najera Inc. for the month ended June 30, 2019. Najera uses the periodic method for inventory.


Calculate cost per unit.
 


 Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.

 

Ending Inventory in Units:
Units available for sale		250
Sales (110 - 15 +  65 )		160
Units remaining in ending inventory		90

Sales Revenue
Date			Units			Unit Price		Total Sales
June	10		110			$70		$7,700
June	11		(15	)		70		(1,050	)
June	25		65			75		4,875
			160					$11,525

(1) LIFO

Ending inventory
June 1		40	@	$40	=	$1,600
June 4		50	@	44	=	2,200
		90				3,800

Cost of Goods Sold
Cost of goods available for sale		$11,110
Less: Ending inventory		3,800
Cost of goods sold		$7,310

Gross profit
Sales revenue		$11,525
Cost of goods sold		7,310
Gross profit		$4,215

(2) FIFO

Ending inventory
June		28		30	@	$50	=	$1,500
June		18		45	@	$46	=	2,070
June		4		15	@	$44	=	660
				90				$4,230

Cost of Goods Sold
Cost of goods available for sale		$11,110
Less: Ending inventory		4,230
Cost of goods sold		$6,880

Gross profit
Sales revenue		$11,525
Cost of goods sold		6,880
Gross profit		$4,645

(3) Average-Cost

Ending inventory = 90 x $44.44 = $3,999.60

Cost of Goods Sold
Cost of goods available for sale		$11,110
Less: Ending inventory		3,999.60
Cost of goods sold		$7,110.40

Gross profit
Sales revenue		$11,525
Cost of goods sold		7,110.40
Gross profit		$4,414.60

Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.
 

(1) LIFO

Gross profit rate
Gross profit		$4,215	=	36.6 %
Net Sales		$11,525

(2) FIFO

Gross profit rate
Gross profit		$4,645	=	40.3 %
Net Sales		$11,525

(3) Average-Cost

Gross profit rate
Gross profit		$4,414.60	=	38.3 %
Net Sales		$11,525

Compare the results for the three cost flow assumptions and answer the following questions.
 
Thank you!