A company that started trading on 1 January 2011 without any opening inventory sold 20,000 items on 31 March 2011 for $10 per item. Raw materials purchased: Items On 1* January 2011l at 8$ per item 12000 On 1* February 2011 at 7$ per item On 1* March 2011 at 7.5$ per item 9000 7000 Calculate Gross Profit by using FIFO, LIFO and AVCO methods and discuss impact on different methods on profit level of company. What can you advise to financial analyst based on your observation of this change on gross profit?

A company that started trading on 1 January 2011 without any opening inventory sold 20,000 items on 31 March 2011 for $10 per item. Raw materials purchased: Items On 1* January 2011l at 8$ per item 12000 On 1* February 2011 at 7$ per item On 1* March 2011 at 7.5$ per item 9000 7000 Calculate Gross Profit by using FIFO, LIFO and AVCO methods and discuss impact on different methods on profit level of company. What can you advise to financial analyst based on your observation of this change on gross profit?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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