Every month, a local auto parts store purchases stainless steel cylinder head ga

ID: 2375448 • Letter: E

Question

Every month, a local auto parts store purchases stainless steel cylinder head gaskets

directly from the manufacturer. The price that the local auto parts store pays is adjusted

monthly due to the high volatility of steel prices.

Beginning inventory January 1st: 500 units at a price of $20

Purchases in January: 100 units at a price of $22

Purchases in February: 225 units at a price of $24.50

Purchases in March: 200 units at a price of $21

At the end of each quarter, the store performs a physical inventory count.

When the current physical inventory count was performed on March 31st, 327 stainless

steel cylinder head gaskets were counted.

Task 1: Calculate the ending inventory value using the First-in, first-out (FIFO) and

Last-in, first-out (LIFO) methods assuming a periodic record keeping method.

Task 2: Calculate Sales, Cost of Goods Sold, and Gross Margin for each inventory

valuation method assuming that the sale price from the local auto parts store to the end

customer is $43 per gasket.

Make sure you explain how you arrive at your solution.

Can Any one help me?

FIFO

ending inventory value= 327*20=6540

LIFO

ending inventory value= 200*21+127*24.5=7311.5

Task 2

FIFO

begining 500*20 10000

Purchase in january 100*22 2200

Purchase in february 225*24.5 5512.5

Purchase in march 200*21 4200

sale 698*43 30014

cost of goods sold 500*20+100*22+98*24.5=14601

gross margin=30014-14601=15413

LIFO

sale 698*43= 30014

Cost of goods sold=200*21+225*24.5+100*22+173*20=15372.5

gross margin=30014-15372.5=14641.5

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