Working as follows:
Compute the weighted average cost per unit as follows:
Date | Description | Units | Unit cost | Total Cost |
Ju. 01 | Beginning Inventory | 40 | $40 | $1,600 |
Ju. 04 | Purchase | 138 | $43 | $5,934 |
Ju. 18 | Purchase | 56 | $46 | $2,576 |
Ju. 18 | Purchase return | -10 | $46 | ($460) |
Ju. 28 | Purchase | 29 | $49 | $1,421 |
Total | 253 | $11,071 | ||
WAC per unit ($11071 ![]() |
$43.76 |
Units Available for sale = 253
Sales (113-15+68) = 166
Ending Inventory = 87
Sale revenue = (113
$67) + (-15
$67)+ (68
$71)
= $$7571 - $1005 + $4828 = $11,394
______________________________________________________________________________
(a2)
Compute Ending inventory, COGS and Gross profit as follows:
1. LIFO: Last in first out
Ending inventory cost = (40 units
$40) + (47 units
$43) = $3621
COGS =Total Cost - Ending inventory cost
= $11,071 - $3621 = $7450
Gross Profit = Sale - COGS
= $11394 - $7450 = $3944
__________________________________________________________________________________
2. FIFO: First in first out
Ending inventory cost = (29 units $49) +[
(56-10) =46 units
$46)
+ (12 units
$43)
= $1421 + $2116 + $516 = $4053
COGS =Total Cost - Ending inventory cost
= $11,071 - $4053 = $7018
Gross Profit = Sale - COGS
= $11394 - $7018 = $4376
_________________________________________________________________________
3. Average Cost:
Ending Inventory cost = 87 units $43.76 (as
computed in working)
= $3807
COGS = Total Cost - Ending inventory cost
= $11,071 - $3807 = $7264
Gross Profit = Sale - COGS
= $11394 - $7264 = $4130
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Calculate gross/ profit rate under /each /of the following
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Unit Cost or
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1
Beginning inventory
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$42
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4
Purchase
138
45
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10
Sale
111
73
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11
Sale return
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73
June
18
Purchase
55
48
June
18
Purchase return
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48
June
25
Sale
63
79
June
28
Purchase
32
53
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