f2 ! Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20 April 21 July 25 September 19 Purchased 390 units @ $3 = Purchased 110 units @ $4 = Purchased 230 units @ $6 = Purchased 90 units @ $8 = During the year, The Shirt Shop sold 620 T-shirts for $13 each. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the Gross margin $ FIFO 5,730 LIFO $ 1,170 440 Difference 1,380 720 and LIFO cost flow assumptions.

Q: Contribution margin means

A: In the production there are many types of cost some cost change with volume but some do not change…

Q: How I can calculate the gross margin?

A: Gross margin formula Sale-Cost of goods sold

Q: Explain the difference between total variable costs and variable costs per unit.

A: Cost can be categorized as variable and fixed costs.

Q: how do I find direct cost per unit

A: Direct Cost A direct cost is a price that is directly associated with the production of particular…

Q: a. Calculate the return on investment. (Round your answer to 2 decimal places.) Return on Investment…

A: Return on Investment: It is a measure of performance and profitability that is applied to evaluate…

Q: What is the difference between Cost-Volume Profit graph and Profit-Volume graph?

A: Introduction:- Cost-Volume Profit graph displays the relationship between the cost of units…

Q: How is Gross Margin % calculated?

A:

Q: what are the differences between the FIFO, LIFO, and the average cost?

A: Inventory: It refers to the items held by an organization which were in various forms like raw…

Q: What's the difference between the profit margin and gross margin ratio?

A: Ratio is the arithmetic relationship between two figures. Accounting ratios shows the…

Q: Malmo, Inc. manufactures travel locks. The budgeted selling price is $12 per lock, the variable cost…

A: Flexible budget means expected income and expenditure in future to find out budgeted income.…

Q: What is operating profit margin?

A: The operating profit is the profit earned during the year after deducting all the operating expenses…

Q: Please explain the calculation of Unit contribution

A: Unit Contribution margin is contribution margin earned per unit It is calculated in 2 ways  Unit…

Q: What are the usefulness of the gross margin method?

A:

Q: Define unit costs.

A: Unit cost is the cost incurred by the company in the production, storage and selling of one unit of…

Q: what would be the difference in gross margin between fifo and lifo cost flow assumptions

A: The difference in gross margin between FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) cost…

Q: How to calculate total prime cost

A: Meaning of Prime Cost: Prime costs are a firm's expenses directly related to the materials and labor…

Q: How is conversion costs per equivalent unit calculated?

A: The cost per unit is calculated as total cost divided by number of units.

Q: example of lower of cost or net realizable value and explain

A: The concept of lower of cost or net realizable value says that the amount of inventory should be…

Q: What is the gross profit margin? Higher ratio or lower ratio

A: Ratio analysis can be defined as the comparative analytical tool. It helps to determine the…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.