Question

The inventory records for Radford Co. reflected the following Beginning inventory@May 1 100 units $4.00 First purchase@May 7 Second purchase @May 17 Third purchase @ May 23 Sales@ May 31 300 units@ $4.40 500 units $4.60 100 units $4.80 900 units $7.80 13. Determine the amount of cost of goods sold assuming the LIFO cost flow method. A. $4,100 B. $4,320 C. $2,360 D. $3,600 15. Determine the amount of gross margin assuming the weighted average cost flow method. A. $3,015 B. $2,412 C. $1,314 D. $2970

Answer 1

13) amount of COGS under LIFO:-

(300 units * $4.40) + (500 units * $4.60) + (100 units * $4.80)

= $4100

option (a) is correct

14) unit cost =[ (300 units * $4.40) + (500 units * $4.60) + (100 units * $4.80) + (100 units * $4)] /1000 units

= $4500/1000 = $ 4.50

gross margin = sale - COGS

= (900 units*$7.80) - (900 units * $4.50) = $2970

option (d) is correct