Chapter 6, Problem E6.20E

Comparing cost of goods sold and gross profit-FIFO, LIFO, and weighted-average methods
Learning Objective 2, 3
1. COGS $2,140
Assume that AB Tire Store completed the following perpetual inventory transactions for a re of tires:

May 1 Beginning merchandise inventory 	16 tires @ $ 65 each 
11 Purchase 	10 tires @ $78 each 
23 Sale 	l2 tires	@ $88 each 
26 Purchase	l4 tires @ $80 each 
29 Sale 	18 tires @ $ 88 each 

Requirements

1. Compute cost of goods sold and gross profit using the FIFO inventory costing method.
2. Compute cost of goods sold and gross profit using the LIFO inventory costing method.
3. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
4. Which method results in the largest gross profit, and why?