Question

Hogan Industries had the following transactions occur during 2014,

February 1, 2014 - 36 units at $45 per unit

March 14, 2014 - 62 units at $47 per unit

May 1, 2014 - 44 units at $49 per unit

The company sold 102 units at $63 each and has tax rate of 30%. Assuming that a periodic inventory sustem is used, what is the company's gross profit using FIFO?

Answer 1

Calculation of Gross Profit
Cost Inventory by date
Date	Units	Per Unit Cost	Total cost		allocation Inventory	Value for allocated Inventory	Descreption
Feb' 1 2014	36	$                  45	$        1,620		36	1,620	all units are sold Considering FIFO method
March' 14 2014	62	$                  47	$        2,914		62	2,914	all units are sold Considering FIFO method
May 1 2014	44	$                  49	$        2,156		4	196	Total Units sold is 103 Less feb 1units of 36 & march 14 62 units are used ((103-36-62=4)*49$ = 196$)
					TOTAL Cost of Units sold(A)	$                                         4,730.00
					Totals Sales Value (102*63$) (B)	$                                         6,426.00
					Gross Profit (B-A)	$                                         1,696.00