Question

You have the following information for Vaughn Manufacturing for the month ended October 31, 2022. Vaughn uses a periodic method for inventory. Date Description Units Unit Cost or Selling Price Oct. 1 Beginning inventory 70 Oct. 9 Purchase Oct. 11 Sale Oct. 17 Purchase Oct. 22 Sale Oct. 25 Purchase Oct. 29 Sale

Answer 1

Ans. A	Date	Description	Units	Unit cost	Total
	Oct-01	Beginning inventory	70	$24	$1,680
	Oct-09	Purchase	125	$26	$3,250
	Oct-17	Purchase	95	$27	$2,565
	Oct-25	Purchase	80	$29	$2,320
	Total		370		$9,815
	Weighted Average cost per unit =   Total cost of goods available for sale / Total units available
		$9,815 / 370
		$26.527	per unit
Ans. 2 A	Units sold   (95 + 70 + 105) =   270 units
	Ending inventory units = Units available for sale - Total units sold
	370 - 270 = 100 units
	Periodic LIFO:
	Date	Units	Rate	Total
	01-Oct	70	$24.00	$1,680
	09-Oct	30	$26.00	$780
	Ending inventory	100		$2,460
	Cost of goods sold = Total cost of goods available for sale - Ending inventory
		$9,815 - $2,460
		$7,355
Ans. 2 B	Periodic FIFO:
	Date	Units	Rate	Total
	25-Oct	80	$29.00	$2,320
	17-Oct	20	$27.00	$540
	Ending inventory	100		$2,860
	Cost of goods sold = Total cost of goods available for sale - Ending inventory
		$9,815 - $2,860
		$6,955
Ans. 2 C	Weighted average cost:
	Ending inventory =   Average cost per unit * Ending inventory units
		$26.527 * 100
		$2,653
	Cost of goods sold = Total cost of goods available for sale - Ending inventory
		$9,815 - $2,653
		$7,162
	*Calculation of sales:
	Date	Units	Rate	Cost
	11-Oct	95	$35.00	$3,325
	22-Oct	70	$40.00	$2,800
	29-Oct	105	$40.00	$4,200
	Total sales			$10,325
			LIFO	FIFO	Weighted average
	Sales    (a)		$10,325	$10,325	$10,325
	(-) Cost of goods sold		-$7,355	-$6,955	-$7,162
	Gross profit (b)		$2,970	$3,370	$3,163
	Gross profit rate   (b/a*100)		28.8%	32.6%	30.6%
	Gross profit rate = Gross profit / Sales * 100