Final answer:
The gross profit earned by the company for each costing method would be calculated as follows: using FIFO, LIFO, weighted average cost, and specific identification methods.
Step-by-step explanation:
First-in-First-Out (FIFO)
To calculate the gross profit using the FIFO method, we need to consider the order in which the units were sold. In this case, the 95 units from the beginning inventory and the 225 units from the March 5 purchase were sold first. We calculate the cost of goods sold by multiplying the number of units sold by their respective costs. The remaining units in inventory are valued at the most recent purchase cost. The gross profit is then calculated by subtracting the cost of goods sold from the sales revenue.
Last-in-First-Out (LIFO)
To calculate the gross profit using the LIFO method, we assume that the units sold are the most recent purchases. In this case, the 75 units from the March 18 purchase and the 115 units from the March 25 purchase were sold. We calculate the cost of goods sold in the same way as in the FIFO method and then subtract it from the sales revenue to find the gross profit.
Weighted Average Cost
To calculate the gross profit using the weighted average cost method, we find the total cost of goods available for sale by adding the beginning inventory cost and the cost of purchases. We then calculate the weighted average cost per unit by dividing the total cost by the total number of units. Finally, we multiply the number of units sold by the weighted average cost per unit to find the cost of goods sold. The gross profit is obtained by subtracting the cost of goods sold from the sales revenue.
Specific Identification
To calculate the gross profit using the specific identification method, we need to assign a specific cost to each unit sold. In this case, we have the information about the units sold from each purchase. We multiply the number of units sold from each purchase by their respective costs and then add up these costs to find the cost of goods sold. The gross profit is obtained by subtracting the cost of goods sold from the sales revenue.