Fresh Foods Supermarket is evaluating its inventory management system using the FIFO (First-In-First-Out) method for the first quarter of 2024. On January 1st, they had an opening inventory of 500 units at $8 per unit. During January, they purchased 300 units at $10 per unit on January 15th and another 400 units at $12 per unit on January 30th. The store sold 600 units in January at $20 per unit. At the end of January, management wants to calculate the cost of goods sold (COGS), ending inventory value, and gross profit. They also need to determine the inventory turnover ratio for January, assuming the beginning inventory from January 1st represents the average inventory. For tax purposes, they need to calculate their gross profit margin percentage.
Fresh Foods Supermarket is evaluating its inventory management system using the FIFO (First-In-First-Out) method for the first quarter of 2024. On January 1st, they had an opening inventory of 500 units at $8 per unit. During January, they purchased 300 units at $10 per unit on January 15th and another 400 units at $12 per unit on January 30th. The store sold 600 units in January at $20 per unit. At the end of January, management wants to calculate the cost of goods sold (COGS), ending inventory value, and gross profit. They also need to determine the inventory turnover ratio for January, assuming the beginning inventory from January 1st represents the average inventory. For tax purposes, they need to calculate their gross profit margin percentage.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Fresh Foods Supermarket is evaluating its inventory
management system using the FIFO (First-In-First-Out)
method for the first quarter of 2024. On January 1st, they had
an opening inventory of 500 units at $8 per unit. During
January, they purchased 300 units at $10 per unit on January
15th and another 400 units at $12 per unit on January 30th.
The store sold 600 units in January at $20 per unit. At the end
of January, management wants to calculate the cost of goods
sold (COGS), ending inventory value, and gross profit. They
also need to determine the inventory turnover ratio for
January, assuming the beginning inventory from January 1st
represents the average inventory. For tax purposes, they need
to calculate their gross profit margin percentage.
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