Question

u XSS News Carwale Health home B2B Marketplace -- ASU HOS M Accounts Help Sav Exercise 5-19 Effect of inventory cost flow (FIFO, LIFO, and weighted average) on gross margin LO 5-6 The following information applies to the questions displayed below) The following information pertains to Mason Company for 2018: Beginning inventory Units purchased 140 units 320 units @ $20 $22 Ending Inventory consisted of 60 units. Mason sold 400 units at $44 each. All purchases and sales were made with cash Operating expenses amounted to $3500. Exercise 5-19 Part a Required a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO (2) LIFO, and (3) weighted average. (Round "Cost per unit" to 2 decimal places and final answers to nearest whole dollar amount FIFO L IFO Weighted Average Gross margin 3 4 5 of 9 !! Next >

Answer 1

Working Notes

Inventry Book FIFO Purchases Unit Cost Total Units Sales Unit Cost Total Date Units Jun-01 320.00 Jun-12 Balance Units Unit Cost 140.00 $ 20.00 140.00 $ 20.00 320.00 $ 22.00 $ 22.00$ 7,040.00 140.00 $ 20.00 $ 2,800.00 260.00 $ 22.00 S 5,720.00 Jun-15 60.00 $ 22.00 Cost of Goods Sold Date Units Unit Cost Cost of Goods sold Jun-15 140.00 $ 20.00 $ 2,800.00 260.00 $ 22.00 $ 5,720.00 400.00 $ 8,520.00 Cost of ending Inventory Units 60.00 60.00 Unit Cost $ 22.00 $ 22.00 Ending Inventory $ 1,320.00 $ 1,320.00

Inventry Book FIFO Sales Purchases Unit Cost Total Units Unit Cost Total Date Units Jun-01 320.00 Jun-12 Balance Units Unit Cost 140.00 $ 20.00 140.00 $ 20.00 320.00 $ 22.00 $ 22.00 $ 7,040.00 320.00 $ 22.00 $ 7,040.00 80.00 $ 20.00 $ 1,600.00 Jun-15 60.00 $ 20.00 Cost of Goods Sold Date Units Unit Cost Jun-15 320.00 $ 22.00 80.00 $ 20.00 400.00 Cost of Goods sold $ 7,040.00 $ 1,600.00 $ 8,640.00 Cost of ending Inventory Units Unit Cost 60.00 $ 20.00 60.00 $ 20.00 Ending Inventory $ 1,200.00 $ 1,200.00

Inventry Book Average Cost Sales Units Unit Cost Total Purchases Date Units Unit Cost Total Jun-01 320.00 $ 22.00 $ 7,040.00 Balance Units Unit Cost Total 140.00 $ 20.00 $ 2,800.00 140.00 $ 20.00 $ 2,800.00 320.00 $ 22.00$ 7,040.00 460.00 $ 21.399,840.00 60.00 $ 21.39 $ 1,283.48 Jun-12 Jun-15 400.00 $ 21.39 $ 8,556.52 Cost of Goods Sold Date Units Unit Cost Cost of Goods sold Jun-15 400.00 $ 21.39 $ 8,556.52 400.00 $ 8,556.52 Cost of ending Inventory Units Unit Cost Ending Inventory 60.00 $ 21.39 $ 1,283.48 60.00 S 1,283.48

Particulars Sales FIFO LIFO Weighted Average 17,600.00 $ 17,600.00 $ 17,600.00 $ Cost of Goods Sold $ Gross Margin $ Gross Margin % Operating expenses $ Operating Income $ 8,520.00 $ 8,640.00 $ 9,080.00 $ 8,960.00 $ 51.59% 50.91% 3,500.00 $ 3,500.00 $ 5,580.00 $ 5,460.00 $ 8,556.52 9,043.48 51.38% 3,500.00 5,543.48