**Cost Flow Methods**The following three identical units of Item P401C are purchased during April:| Date | Item Beta | Units | Cost ||---------|------------|-------|------|| April 2 | Purchase | 1 | $100 || April 15| Purchase | 1 | $120 || April 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 30 using the following methods:**1. **First-in, first-out (FIFO)**2. **Last-in, first-out (LIFO)**3. **Weighted average cost method****Calculations**- **Gross Profit** - **(a) FIFO:** \[ \text{Sales} - \text{Cost of Goods Sold} = \text{Gross Profit} \] (FIFO assumes the first units purchased are sold first.) - **(b) LIFO:** \[ \text{Sales} - \text{Cost of Goods Sold} = \text{Gross Profit} \] (LIFO assumes the last units purchased are sold first.) - **(c) Weighted Average Cost:** \[ \text{Sales} - \text{Cost of Goods Sold} = \text{Gross Profit} \]- **Ending Inventory** - Complete values based on the methods described.**Feedback:**- **Check My Work:** - Explanation that the sales minus cost of goods sold equals gross profit, along with the FIFO method explanation that it assumes the first units purchased are sold first.This section will help students understand the different inventory costing methods and calculate appropriate financial metrics based on those methods.

Name: **Cost Flow Methods**The following three identical units of Item P401
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Description: **Cost Flow Methods**The following three identical units of Item P401C are purchased during April:| Date | Item Beta | Units | Cost ||---------|------------|-------|------|| April 2 | Purchase | 1 | $100 || April 15| Purchase | 1 | $

Answered: Determine the gross profit for April…

Business

Accounting

Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIF0); (b) last-in, (c) weighted average cost method.

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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