Question

Required information [The following information applies to the questions displayed below.) The following information pertains to Mason Company for Year 2: Beginning inventory Units purchased 132 units @ $ 38 390 units e $ 57 Ending inventory consisted of 50 units. Mason sold 472 units at $114 each. All purchases and sales were made with cash. Operating expenses amounted to $3,675. 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 3 decimal places and final answers to the nearest whole dollar amount.) Gross Margin FIFO LIFO Weighted average

Answer 1

	Gross Margin	Net Income	Ending Inventory
FIFO	$      29,412	$     25,737	$        2,850
LIFO	$      28,462	$     24,787	$        1,900
Weighted - Average	$      29,172	$     25,497	$        2,610
Workings:
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
FIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory	Cost per unit	Ending Inventory
Beginning Inventory	132	$       38.00	$        5,016	132	$       38.00	$       5,016	-	$    38.00	$                 -
Purchases	390	$       57.00	$     22,230	340	$       57.00	$     19,380	50	$    57.00	$          2,850
Total	522		$     27,246	472		$     24,396	50		$          2,850
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
LIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory	Cost per unit	Ending Inventory
Beginning Inventory	132	$       38.00	$        5,016	82	$       38.00	$       3,116	50	$    38.00	$          1,900
Purchases	390	$       57.00	$     22,230	390	$       57.00	$     22,230	-	$    57.00	$                 -
Total	522		$     27,246	472		$     25,346	50		$          1,900
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
Weighted - Average	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory	Cost per unit	Ending Inventory
Beginning Inventory	132	$       38.00	$        5,016
Purchases	390	$       57.00	$     22,230
Total	522	$     52.195	$     27,246	472	$     52.195	$     24,636	50	$ 52.195	$          2,610
	FIFO	LIFO	Weighted - Average
Sales	$      53,808	$     53,808	$     53,808
Cost of goods sold	$      24,396	$     25,346	$     24,636
Gross profit	$      29,412	$     28,462	$     29,172
Operating expenses	$        3,675	$       3,675	$        3,675
Net Income	$      25,737	$     24,787	$     25,497