Sprint Shoes Inc. had a beginning inventory of 9,700 units on January 1, 20X1. The costs associated with the inventory were: Material $ 14.00 per unit Labor 9.00 per unit Overhead 6.10 per unit During 20X1, the firm produced 43,900 units with the following costs: Material $ 14.50 per unit Labor 6.80 per unit Overhead 7.30 per unit Sales for the year were 47,530 units at $39.60 each. Sprint Shoes uses LIFO accounting. a. What was the gross profit? b. What was the value of ending inventory?
Sprint Shoes Inc. had a beginning inventory of 9,700 units on January 1, 20X1. The costs associated with the inventory were: Material $ 14.00 per unit Labor 9.00 per unit Overhead 6.10 per unit During 20X1, the firm produced 43,900 units with the following costs: Material $ 14.50 per unit Labor 6.80 per unit Overhead 7.30 per unit Sales for the year were 47,530 units at $39.60 each. Sprint Shoes uses LIFO accounting. a. What was the gross profit? b. What was the value of ending inventory?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Sprint Shoes Inc. had a beginning inventory of 9,700 units on January 1, 20X1. The costs associated with the inventory were:
Material $ 14.00 per unit
Labor 9.00 per unit
During 20X1, the firm produced 43,900 units with the following costs:
Material $ 14.50 per unit
Labor 6.80 per unit
Overhead 7.30 per unit
Sales for the year were 47,530 units at $39.60 each. Sprint Shoes uses LIFO accounting.
a. What was the gross profit?
b. What was the value of ending inventory?
Expert Solution
Step 1
The inventory valuation is based on the flow of inventory. The LIFO method says that recently purchased units should be issued first.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education