During the year, a company sold 8,500 units of inventory for $30 per unit. In addition, the company had the following information related to beginning inventory and purchases during the year. Date Number of Units Unit Cost Total Cost Beginning 1,200 $10.25 $ 12,300 March 12 2,200 10.30 22,660 June 5 2,700 10.40 28,080 October 22 3,900 10.60 41,340 Totals 10,000 $104,380 Required: Calculate ending inventory and cost of goods sold using (a) FIFO, (b) LIFO, and (c) weightedaverage. In addition, (d) calculate gross profit for each method. How would your answers change and how would gross profit compare across the three methods if the unit costs on March 12, June 5, and October 22 were instead $10.20, $10.10, and $10.00, respectively?
During the year, a company sold 8,500 units of inventory for $30 per unit. In addition, the company had the following information related to beginning inventory and purchases during the year. Date Number of Units Unit Cost Total Cost Beginning 1,200 $10.25 $ 12,300 March 12 2,200 10.30 22,660 June 5 2,700 10.40 28,080 October 22 3,900 10.60 41,340 Totals 10,000 $104,380 Required: Calculate ending inventory and cost of goods sold using (a) FIFO, (b) LIFO, and (c) weightedaverage. In addition, (d) calculate gross profit for each method. How would your answers change and how would gross profit compare across the three methods if the unit costs on March 12, June 5, and October 22 were instead $10.20, $10.10, and $10.00, respectively?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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During the year, a company sold 8,500 units of inventory for $30 per unit. In addition, the company had the following information related to beginning inventory and purchases during the year.
| Date | Number of Units | Unit Cost | Total Cost |
| Beginning | 1,200 | $10.25 | $ 12,300 |
| March 12 | 2,200 | 10.30 | 22,660 |
| June 5 | 2,700 | 10.40 | 28,080 |
| October 22 | 3,900 | 10.60 | 41,340 |
| Totals | 10,000 | $104,380 |
Required:
Calculate ending inventory and cost of goods sold using (a) FIFO, (b) LIFO, and (c) weightedaverage. In addition, (d) calculate gross profit for each method. How would your answers change and how would gross profit compare across the three methods if the unit costs on March 12, June 5, and October 22 were instead $10.20, $10.10, and $10.00, respectively?
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