x y D Learning Personalized . Prac x Q WileyPLUS Orion Chapter 6 F x Patent Form

Question

x y D Learning Personalized . Prac x Q WileyPLUS Orion Chapter 6 F x Patent Forms Secure https://adaptive wileyplus consecureadaptiveLearningDashboard?chld:MzgwNzE3NDE%253DA practiceT Canvas SL WileyPLUSs ORION Accounting, 6e Practice-Ch 6: Reporting and Analyzing Inventory Q 6.27: Gibson Company began August with 200 units of Product BR having a unit cost of $8 in inventory. Relevant Pe information is listed as follows: August 6 August 17 August 21 August 30 200 units at $10 per unit 180 units at $24 per unit 400 units at $12 per unit 340 units at $24 per unit Purchase Ab if Gibson Company uses the average cost method inventory cost flow assumption, what amount will it report as gross profit for August? A $2,940 B $6,480 C 7,440 D $7,020 Appl SUBMIT Mark for Review Confidence 888 F 9 2 3 4 5 6

Explanation / Answer

Unit cost= Total cost/ total number of units available for sale                  = (200*8+200*10+400*12)/(200+200+400)=8400/800= $10.5 Units available for sale= 200+200+400=800 Units sold= 180+340= 520 Ending inventory=800-520=280 Cost of goods sold= 520*10.50= $5460 Ending inventory= 280*10.5= $2940 Gross profit= sales- cost of goods sold                       =(520*24)-5460= 12480-5460=7020 Gross profit= $7020 So correct answer is D) $7020 Assumption: Periodic method of inventory method valuation is followed.

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