(Solution) - Suppose a Costco store in Gainesville Missouri ended May 2016 -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Suppose a Costco store in Gainesville, Missouri, ended May 2016 with 1,000,000 units of merchandise that cost $8 each. Suppose the store then sold 100,000 units for $850,000 during June. Further, assume the store made two large purchases during June as follows:

Requirements
1. Calculate the store's gross profit under both FIFO and LIFO at June 30.
2. What caused the FIFO and LIFO gross profit figures to differ?