Compute gross profit earned by the company for each of the four costing methods.
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | ||||
|---|---|---|---|---|---|---|---|
| January 1 | Beginning inventory | 645 | units | @ $45.00 per unit | |||
| February 10 | Purchase | 490 | units | @ $42.00 per unit | |||
| March 13 | Purchase | 245 | units | @ $27.00 per unit | |||
| March 15 | Sales | 980 | units | @ $75.00 per unit | |||
| August 21 | Purchase | 145 | units | @ $50.00 per unit | |||
| September 5 | Purchase | 545 | units | @ $46.00 per unit | |||
| September 10 | Sales | 690 | units | @ $75.00 per unit | |||
| Totals | 2,070 | units | 1,670 | units |
Required:
- Compute gross profit earned by the company for each of the four costing methods.
Note: Round your average cost per unit to 2 decimal places. Round your final answers to the nearest whole dollar amount.
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- Cost Flow Methods The following three identical units of Item JC07 are purchased during April: Item Beta Units Cost April 2 Purchase 1 $113 April 15 Purchase 1 117 April 20 Purchase 1 121 Total 3 $351 Average cost per unit $117 ($351 ÷ 3 units) Assume that one unit is sold on April 27 for $164. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) $ $ b. Last-in, first-out (LIFO) $ $ c. Weighted average cost $ $Cost Flow Methods The following three identical units of Item JC07 are purchased during April: Item Beta Units Cost April 2 Purchase 1 $177 April 15 Purchase 1 179 April 20 Purchase 1 181 Total 3 $537 Average cost per unit $179 ($537 ÷ 3 units) Assume that one unit is sold on April 27 for $234. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) $fill in the blank 1 $fill in the blank 2 b. Last-in, first-out (LIFO) $fill in the blank 3 $fill in the blank 4 c. Weighted average cost $fill in the blank 5 $fill in the blank 6COst Flow Methods The following thren identical units of Item K113 are purchased during April Item Beta Units Cost April 2 Purchase $153 April 15 Purchase 155 April 20 Purchase 157 Total $465 Average cost per unit $155 (s4653 units) Assume that one unit is sold on Apri 27 for $219. Detemime the gross profit for April and ending ventory on April 30 using the (a) first-in, first-out (FIro), (b) last-n, first out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) Weighted average cost
- Cost flow methodsThe following three identical units of Item P401C are purchased duringApril: Item Beta Units Cost April 2 Purchase 1 $100 15 Purchase 1 120 20 Purchase 1 140 Total 3 $360 Average cost per unit $120 ($360 / 3 units) Assume that one unit is sold on April 27 for $300.Determine the gross profit for April and ending inventory on April 30using the (A) first-in, first-out (FIFO); (B) last-in, first-out (UFO); and (C)weighted average cost methods.Unit Total Balance Date Date Explanation Units Cost Cost in Units June Jun-01 Beginning inventory 50 1.0 50 50 Jun-06 Purchase 50 1.2 60 100 Jun-10 Sales 20 80 Jun-13 Purchase 150 1.4 210 230 Jun-18 Sales 100 130 Jun-20 Purchase 100 1.6 160 230 Jun-30 Purchase 150 1.8 270 380 750 Round your answer to the nearest dollar. (eg $54.4.input as 54, $54.5 input as 55 ) (do not input comma ",", dollar sign "$" for numerical figures) FIFO Periodic System Cost of Good Sold Ending Inventory Average Cost Periodic System Cost of Good Sold Ending Inventory FIFO Perpetual System Cost of Good Sold Ending Inventory Average Cost Perpetual System Cost of Good Sold Ending InventoryDate Activities Units Acquired at Cost 10 units @ $25 = $250 15 units @ $28 = $420 Units Sold August 2 August 18 August 29 August 31 Purchase Purchase Sales 20 unit Purchase 14 units @ $29 = $406 What is the per unit value of ending inventory on August 31? Answers should be rounded to the nearest cent. Multiple Choice $28.42 $26.80 $29.00 $25.00 O $30.35
- Cost Flow Methods The following three identical units of Item JC07 are purchased during April: Item JC07 Units Cost April 2 Purchase 1 $313 April 14 Purchase 1 317 April 28 Purchase 1 321 Total 3 $951 Average cost per unit $317 ($951 ÷ 3 units) Assume that one unit is sold on April 30 for $422. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods. Gross Profit Ending Inventory a. First-in, first-out (FIFO) $fill in the blank 1 $fill in the blank 2 b. Last-in, first-out (LIFO) $fill in the blank 3 $fill in the blank 4 c. Weighted average cost $fill in the blank 5 $fill in the blank 6Cost Flow Methods The following three identical units of Item BZ1810 are purchased during November: Item BZ1810 Units Cost Nov. 2 Purchase 1 $55 14 Purchase 1 57 28 Purchase 1 62 Total 3 $174 Average cost per unit $58 ($174 ÷ 3 units) Assume that one unit is sold on November 30 for $90. Determine the gross profit for November and ending inventory on November 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods. Gross Profit Ending Inventory a. First-in, first-out (FIFO) $ $ b. Last-in, first-out (LIFO) $ $ c. Weighted average cost $ $ DO NOT GIVE SOLUTION IN MAGEActivities Units Acquired at Cost 100 units @ $50 per unit 400 units @ $55 per unit Date Mar. Mar. Mar. Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Units Sold at Retail 1 Beginning inventory 5 Purchase 9 Sales 420 units @ $85 per unit 120 units @ $60 per unit 200 units @ $62 per unit 160 units @ $95 per unit Totals 820 units 580 units 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase. Complete this question by entering your answers in the tabs below. Weighted Average Perpetual FIFO Perpetual LIFO Specific Id Compute the cost assigned to ending inventcry using specific identification. For specific identification, the March 9 sale consisted of 80 units from beginning…
- Date January 1 February 10 March 13 March 15 August 21 Activities Beginning inventory Purchase Purchase Sales Purchase Purchase September 5 September 10 Sales Totals Cost of goods available for sale Number of units available for sale Units Acquired at Cost 600 units @ $40 per unit 400 units @ $37 per unit 190 units @ $15 per unit Ending inventory 190 units @ $45 per unit 550 units @ $43 per unit 385 units 1,930 units Required: 1. Compute cost of goods available for sale and the number of units available for sale. 73,850 2. Compute the number of units in ending inventory. 1,930 units Units Sold at Retail 805 units @ $70 per unit 740 units @ $70 per unit 1,545 units 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 190 from the March 13 purchase, 140 from the August 21 purchase, and 315…Cost Flow Methods The following three identical units of Item JC07 are purchased during April: Item Beta. Units Cost April 2 April 15 April 20 Total Purchase Purchase a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost Purchase 1 1 1 3 $76 80 84 $240 $80 Average cost per unit ($240 + 3 units) Assume that one unit is sold on April 27 for $106. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending InventoryRequired information Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 15 units for $20 each. Purchases on December 7 Purchases on December 14 Purchases on Decenber 21 10 units e 6.00 cont 20 units e 512.00 cost 15 units e $14.00 cost Required: Monson sells 15 units for $20 each on December 15. Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory when costs are assigned based on LIFO.