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Muggle Inc. sells high-end brooms at a retail price of $450 each. These specialty brooms...

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Accounting

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Muggle Inc. sells high-end brooms at a retail price of $450 each. These specialty brooms "magically" sweep by themselves. Below is the opening inventory data for Muggle Inc. on January 1 20x9: Date # of Units Balance Jan 1, 2x9 2,000 $480,000 During 20x9, Muggle made the following purchases of brooms: Date # of Units Cost/Unit Total Cost March 31 5,000 $250 $1,250,000 July 15 5,000 $260 $1,300,000 Nov 1 4,000 $290 $1,160,000 Having found a real niche market, the brooms flew off the shelves during the year, and total units sold were 14,750! Muggle Inc. uses a periodic inventory system. Required - What would their gross profit for 20x9 be for the year ended December 31, 20x9 if: a) They use the FIFO inventory method. (6 marks) b) They use Weighted Average inventory method. (3 marks) (round any calculation to nearest 2 decimal places)

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