Question

You have the following information for Metlock, Inc. for the month ended October 31, 2017. Metlock, Inc. uses a periodic method for inventory. Date Description Units Unit Cost or Selling Price Oct. 1 Beginning inventory 60 $26 Oct. 9 Purchase 128 28 Oct. 11 Sale 109 34 Oct. 17 Purchase 110 29 Oct. 22 Sale 55 39 Oct. 25 Purchase 71 31 Oct. 29 Sale 118 39 Calculate the weighted-average cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average cost per unit $enter the Weighted-average cost per unit in dollars rounded to 3 decimal places Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (Round answers to 0 decimal place, e.g. 125.) LIFO FIFO AVERAGE-COST The ending inventory $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places The cost of goods sold $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places Gross profit $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (Round answers to 1 decimal place, e.g. 51.2%) LIFO FIFO AVERAGE-COST Gross profit rate enter percentages rounded to 1 decimal place % enter percentages rounded to 1 decimal place % enter percentages rounded to 1 decimal place %

Answer 1

Requirement a: Compute weighted average cost per units as follows

	Cost of goods Available for Sale
	Units	Costs	Amount
Beginning Inventory	60	$26	$1,560
Purchases
Oct. 9	128	$28	$3,584
Oct. 17	110	$29	$3,190
Oct. 25	71	$31	$2,201
Total	369	$28.550	$10,535

Note: $28.550 ($10,535 ÷ 369 units)

Requirement b; Compute ending inventory, cost of good sold and gross profit as follows

Particulars	LIFO	FIFO	Average Cost
Ending Inventory	$2,316	$2,665	$2,484
Cost of Goods Sold	$8,219	$7,870	$8,051
Gross Profit	$2,234	$2,583	$2,402

Notes: Cost of goods sold and ending inventory under LIFO method

	Cost of goods Available for Sale			Cost of Goods Sold			Ending Inventory
	Units	Costs	Amount	Units	Costs	Amount	Units	Costs	Amount
Beginning Inventory	60	$26	$1,560				60	$26	$1,560
Purchases
Oct. 9	128	$28	$3,584	101	$28	$2,828	27	$28	$756
Oct. 17	110	$29	$3,190	110	$29	$3,190
Oct. 25	71	$31	$2,201	71	$31	$2,201
Total	369		$10,535	282		$8,219	87		$2,316

Compute cost of goods sold and ending inventory under FIFO method:

	Cost of goods Available for Sale			Cost of Goods Sold			Ending Inventory
	Units	Costs	Amount	Units	Costs	Amount	Units	Costs	Amount
Beginning Inventory	60	$26	$1,560	60	$26	$1,560
Purchases
Oct. 9	128	$28	$3,584	128	$28	$3,584
Oct. 17	110	$29	$3,190	94	$29	$2,726	16	$29	$464
Oct. 25	71	$31	$2,201				71	$31	$2,201
Total	369		$10,535	282		$7,870	87		$2,665

Compute cost of goods sold and ending inventory under weighted average method as follows

	Cost of goods Available for Sale			Cost of Goods Sold			Ending Inventory
	Units	Costs	Amount	Units	Costs	Amount	Units	Costs	Amount
Beginning Inventory	60	$26	$1,560
Purchases
Oct. 9	128	$28	$3,584
Oct. 17	110	$29	$3,190
Oct. 25	71	$31	$2,201
	369	$28.550	$10,535	282	$28.550	$8,051	87	$28.550	$2,484

Requirement c: Compute gross profit percentage as follows:

Particulars	LIFO	FIFO	Average Cost
Sales Revenue (a)	$10,453	$10,453	$10,453
Deduct: Cost of Good Sold	$8,219	$7,870	$8,051
Gross Profit (b)	$2,234	$2,583	$2,402
Gross Profit Percentage (b) ÷ (a) * 100	21.4%	24.7%	23.0%

Note: Compute sales revenue as follows

Particulars	Units	Price	Amount
Oct. 11 Sale	109	$34	$3,706
Oct. 22 Sale	55	$39	$2,145
Oct. 29 Sale	118	$39	$4,602
Total Sales Revenue	282		$10,453