Cast Iron Grills, Incorporated, manufactures premium gas barbecue grills. The
company reports inventory and cost of goods sold based on calculations from a LIFO
periodic inventory system. Cast Iron's December 31, 2024, fiscal year-end inventory
consisted of the following (listed in chronological order of acquisition):
Units. Unit cost
6,800. 600
4,900. 700
7,800. 800

The replacement cost of the grills throughout 2025 was $900. Cast Iron sold 36,000
grills during 2025. The company's selling price is set at 200% of the current
replacement cost.

Required:
1. & 2. Compute the gross profit (sales minus cost of goods sold) and the gross profit
ratio for 2025 under two different assumptions. First, that Cast Iron purchased 37,000
units and, second, that Cast Iron purchased 19,500 units during the year.
4. Compute the gross profit (sales minus cost of goods sold) and the gross profit ratio
for 2025 assuming that Cast Iron purchased 37,000 units (as per the first assumption)
and 19,500 units (as per the second assumption) during the year and uses the FIFO
inventory cost method rather than the LIFO method.