AC224 3. The following data is available for one of the products ventory system:

Question

AC224 3. The following data is available for one of the products ventory system: May 24, 2017 of the products sold by Wild Opties Company, which uses the periodic in- Company Dec. I On hand, 10 units at $8.00 each S Purchased 30 units at $7.80 each 18 Purchased 40 units at $8.15 each 20 units at $8.25 each s 80 234 326 165 $805 Available for sale during December-100 units ild Optics had 25 units on hand. the amounts for the December 31 ending inventory, December for each of the inventory costing methods listed below The 75 units sold created revenue of $13 each. Determine y costine try, the cost of goods sold for December, and the gross margin for goods sord Gross Profit Cost of Goods Sold a. Weighted b. FIFO . LIFO averageEnding Inventory 37125 6o1. 15 315.75 205.75 13 99,25

Explanation / Answer

a) Weighted average: Unit cost= Total cost/ total number of units available for sale                  = 805/100= $8.05 Ending inventory= 25*8.05= $201.25 Cost of goods sold= 75*8.05= $603.75 Gross profit= sales- cost of goods sold                       =(75*13)-603.75= $371.25 Gross profit= $371.25 b) FIFO Units available for sale= 75 Units sold=75 Ending inventory= 25 Cost of goods sold Units Unit cost Total Sale from beginning inventory dec 1 10 8 80 Sale from purchase Dec 5 30 7.8 234 Sale from purchase Dec18 35 8.15 285.25 75 599.25 Ending inventory Units Unit cost Total Inventory from purchase Dec 18 5 8.15 40.75 Inventory from purchase Dec 24 20 8.25 165 25 205.75 Ending inventory is $205.75 Cost of goods sold= $599.25 Gross profit= sales- cost of goods sold                         = (75*13)-599.25= 975-599.25=$375.75 Gross profit= $375.75 c) LIFO Units available for sale= 75 Units sold=75 Ending inventory= 25 Cost of goods sold Units Unit cost Total Sale from Purchase Dec 24 20 8.25 165 Sale from purchase Dec 18 40 8.15 326 Sale from purchase Dec 5 15 7.8 117 75 608 Ending inventory Units Unit cost Total Inventory from beiginning inventory 10 8 80 Inventory from purchase Dec 5 15 7.8 117 Totall 25 197 Ending inventory is $197 Cost of goods sold= $608 Gross profit= sales- cost of goods sold                         = (75*13)-608= 975-608=$367 Gross profit= $367

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