The following three identical units of Item P401C are purchased during April: Item Beta Units Cost Apr. 2 Purchase $100 Apr. 15 Apr. 20 Total Average cost per unit ($360 + 3 units) Purchase 120 Purchase 140 3 $360 $120 Assume that one unit is sold on April 27 for $300. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost Gross Profit Ending Inventory 1000
The following three identical units of Item P401C are purchased during April: Item Beta Units Cost Apr. 2 Purchase $100 Apr. 15 Apr. 20 Total Average cost per unit ($360 + 3 units) Purchase 120 Purchase 140 3 $360 $120 Assume that one unit is sold on April 27 for $300. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost Gross Profit Ending Inventory 1000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Cost flow methods
The following three identical units of Item P401C are purchased during April:
Item Beta Units Cost
Apr. 2
Apr. 15
Apr. 20
Total
Average cost per unit ($360 ÷ 3 units)
Purchase
1 $100
Purchase
1
120
Purchase
1
140
3
$360
$120
Assume that one unit is sold on April 27 for $300.
Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost
method.
Gross Profit
Ending Inventory
a. First-in, first-out (FIFO)
b. Last-in, first-out (LIFO)
c. Weighted average cost
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VIEWStep 2: Computation of cost of goods sold & ending inventory using First-in, First-out:
VIEWStep 3: Computation of cost of goods sold & ending inventory using Last-in, First-out:
VIEWStep 4: Computation of cost of goods sold & ending inventory using Weighted Average Cost:
VIEWStep 5: Computation of the gross profit for April using each of three methods:
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