Music Unlimited carries a large inventory of guitars and other musical instruments. The store uses a perpetual inventory system.Company records indicate the following for a particular line of guitars.Gross margin under FIFO is $.Quantity Unit Cost$980DateItemGross margin under weighted-average-cost is $Nov. 1Balance46.Sale28Purchase13910The moving-weighted-average-cost method produces aV cost of goods sold (and therefore a higher gross17SalePurchase4margin) because unit inventory costs areV in this scenario. Whilecounts308910the earlier inventory first, thecost of goods sold.method uses all inventory on hand in determining theThe sale price of each guitar was $1,640.E (Click the icon to view the cost of goods sold calculation from the FIFO perpetual inventory record.)E (Click the icon to view the cost of goods sold calculation from the moving-weighted-average-cost perpetualinventory record.)RequiredCalculate the gross margin for Music Unlimited Store under both the FIFO and the moving-weighted-average-cost methods.Explain why the gross margin is higher under the moving-weighted-average-cost method. Moving-Weighted-Average Cost Perpetual Inventory RecordFIFO Perpetual Inventory RecordQuantity Unit Cost Total Cost980DateDateQuantity Unit Cost Total CostNov.62980.001,960Nov.6.1,96041,960179801,96017919.3321,82017910Total5,6376Total6.5,740PrintDonePrintDone

Name: Music Unlimited carries a large inventory of guitars and other musica
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Description: Music Unlimited carries a large inventory of guitars and other musical instruments. The store uses a perpetual inventory system.Company records indicate the following for a particular line of guitars.Gross margin under FIFO is $.Quantity Unit Cost$9

Sales = total 6 units x 1640 = 9840

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Accounting

Music Unlimited carries a large inventory of guitars and other musical instruments. The store uses a perpetual inventory system. Company records indicate the following for a particular line of guitars. Gross margin under FIFO is S Date Item Quantity Unit Cost Gross margin under weighted-average-cost is S. Nov. 1 6 Balance 4 $980 Sale 2 Purchase 13 910 The moving-weighted-average-cost method produces a V cost of goods sold (and therefore a higher gross 17 Sale margin) because unit inventory costs are V in this scenario. While V counts 30 Purchase 910 the earlier inventory first, the V method uses all inventory on hand determining the The sale price of each guitar was $1,640. cost of goods sold. E (Click the icon to view the cost of goods sold calculation from the FIFO perpetual inventory record.) E (Click the icon to view the cost of goods sold calculation from the moving-weighted-average-cost perpetual inventory record.) Required Calculate the gross margin for Music Unlimited Store under both the FIFO and the moving-weighted-average-cost methods. Explain why the gross margin is higher under the moving-weighted-average-cost method.

Music Unlimited carries a large inventory of guitars and other musical instruments. The store uses a perpetual inventory system. Company records indicate the following for a particular line of guitars. Gross margin under FIFO is S Date Item Quantity Unit Cost Gross margin under weighted-average-cost is S. Nov. 1 6 Balance 4 $980 Sale 2 Purchase 13 910 The moving-weighted-average-cost method produces a V cost of goods sold (and therefore a higher gross 17 Sale margin) because unit inventory costs are V in this scenario. While V counts 30 Purchase 910 the earlier inventory first, the V method uses all inventory on hand determining the The sale price of each guitar was $1,640. cost of goods sold. E (Click the icon to view the cost of goods sold calculation from the FIFO perpetual inventory record.) E (Click the icon to view the cost of goods sold calculation from the moving-weighted-average-cost perpetual inventory record.) Required Calculate the gross margin for Music Unlimited Store under both the FIFO and the moving-weighted-average-cost methods. Explain why the gross margin is higher under the moving-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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