Norman's Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2020, Norman adopted dollar-value LIFO and decided to use a single inventory pool. The company's January 1 inventory consists of: Category Quantity Cost per Unit Total Cost Portable 6,000 $100 $ 600,000 Midsize 8,000 250 2,000,000 Flat-screen 3,000 400 1,200,000 17,000 $3,800,000 During 2020, the company had the following purchases and sales. Category QuantityPurchased Cost per Unit Quantity Sold Selling Price per Unit Portable 15,000 $110 14,000 $150 Midsize 20,000 300 24,000 405 Flat-screen 10,000 500 6,000 600 45,000 44,000 Instructions (Round to four decimals.) a. Compute ending inventory, cost of goods sold, and gross profit. b. Assume the company uses three inventory pools instead of one. Repeat instruction (a).
Norman's Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2020, Norman adopted dollar-value LIFO and decided to use a single inventory pool. The company's January 1 inventory consists of: Category Quantity Cost per Unit Total Cost Portable 6,000 $100 $ 600,000 Midsize 8,000 250 2,000,000 Flat-screen 3,000 400 1,200,000 17,000 $3,800,000 During 2020, the company had the following purchases and sales. Category QuantityPurchased Cost per Unit Quantity Sold Selling Price per Unit Portable 15,000 $110 14,000 $150 Midsize 20,000 300 24,000 405 Flat-screen 10,000 500 6,000 600 45,000 44,000 Instructions (Round to four decimals.) a. Compute ending inventory, cost of goods sold, and gross profit. b. Assume the company uses three inventory pools instead of one. Repeat instruction (a).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Norman's Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2020, Norman adopted dollar-value LIFO and decided to use a single inventory pool. The company's January 1 inventory consists of:
| Category | Quantity | Cost per Unit | Total Cost | |||
| Portable | 6,000 | $100 | $ 600,000 | |||
| Midsize | 8,000 | 250 | 2,000,000 | |||
| Flat-screen | 3,000 | 400 | 1,200,000 | |||
| 17,000 | $3,800,000 |
During 2020, the company had the following purchases and sales.
| Category | Quantity Purchased |
Cost per Unit | Quantity Sold |
Selling Price per Unit |
||||
| Portable | 15,000 | $110 | 14,000 | $150 | ||||
| Midsize | 20,000 | 300 | 24,000 | 405 | ||||
| Flat-screen | 10,000 | 500 | 6,000 | 600 | ||||
| 45,000 | 44,000 |
Instructions
(Round to four decimals.)
a. Compute ending inventory, cost of goods sold, and gross profit.
b. Assume the company uses three inventory pools instead of one. Repeat instruction (a).
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How did the rate of $265.32 for the closing inventory balance calculated?
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