Inventory purchase and sales data are as follows. [Note: There was no inventory
ID: 2498623 • Letter: I
Question
Inventory purchase and sales data are as follows. [Note: There was no inventory before the purchase made on January 1.]
Purchased on January 1 -- 100 units, $9 cost per unit
Purchased on January 16 -- 300 units, $8 cost per unit
Purchased on January 25 -- 400 units, $7 cost per unit
Sold on January 31 -- 500 units, $10 selling price per unit
The company uses AVERAGE COST. Compute GROSS MARGIN for January.
$2,287
$2,787
$1,000
$1,187
$3,813
$1,100
$2,287
$2,787
$1,000
$1,187
$3,813
$1,100
Explanation / Answer
Solution :
QTY
RATE
TOTAL
SALES
500
10
5000
0
PURCHASE
100
9
900
300
8
2400
400
7
2800
TOTAL
800
6100
Average cost (6100/800)
7.625
COGS (500*7.625)
3813
Gross margin
1,187
QTY
RATE
TOTAL
SALES
500
10
5000
0
PURCHASE
100
9
900
300
8
2400
400
7
2800
TOTAL
800
6100
Average cost (6100/800)
7.625
COGS (500*7.625)
3813
Gross margin
1,187
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