Question

14) Layer, Inc. is a retail company. During May 2018, Layer had 3 purchases and 3 sales of inventory. Date Beg. Inv1-May Purchase #1 8-May Purchase #2 18-May Purchase #3 25-May Units 350 400 Price $5.00 $8.00 $8.42 $8.95 Extended $1,750 $3,200 $4,210 $7,160 $16,320 Sale #1 Sale #2 Sale #3 Date 11-May 22-May 28-May Units 600 500 700 1,800 500 800 2,050 How much gross profit will Layer report in May 2018 assuming the company uses Weighted Average and has a $12 per unit selling price? Do not round your intermediate calculations but do round your final cost of goods sold for each date to the nearest $1. A) $7,497 B) $7,270 C) $7,480 D) $7,466 E) $7,618

Answer 1

Correct Answer: option : B

Gross Profit = $ 7270.00

Working:

Weighted Average Cost Per unit
Units		(A)	2050
Total Cost		(B)	$            16,320.00
Average Cost		(C=B/A)	$                       7.96

Weighted Average
Units Sold			1800
Valuation
Cost of Goods Sold		1800		$                       7.9610	$    14,329.76
Total Cost of Goods Sold		1800	units		$    14,329.76

Sales Revenue = 1800 units * $ 12 = $21,600.00

		Weighted Average
A	Sales Revenue	$    21,600.00
B	Cost of goods sold	$    14,329.76
C =A-B	Gross profit	$            7,270

End of answer.

Please give a thumbs-up, it will be highly appreciated.

Thanks.