Question

Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 100 units from beginning inventory and 230 units from the March 5 purchase; the March 29 sale consisted of 80 units from the March 18 purchase and 120 units from the March 25 purchase.
hapter 05 Pre But Problems X C Get Homework Help With Chego X G Hemming uses a perpetual inver X OX Sign out @ sources - Google Docs W newconnect.mheducation.com/flow/connect.html Chapter 05 Pre-Built Problems Help Save & Exit Submit Check my work Required information Problem 5-1A Perpetual: Alternative cost flows LO P1 The following information applies to the questions displayed below.) Part 4 of 4 Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. points Units Sold at Retail Units Acquired at Cost 170 units @ $52.40 per unit 260 units@ $57.40 per unit eBook 330 units@ $87.48 per unit Date Activities Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Totals 120 units @ $62.40 per unit 220 units @ $64.40 per unit Ask 280 units@ $97.40 per unit 530 units Print 770 units References Problem 5-1A Part 4 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 100 units from beginning inventory and 230 units from the March 5 purchase, the March 29 sale consisted of 80 units from the March 18 purchase and 120 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.) Vera < Prev 8 of 9 Next > 9 MOI 03:42

Answer 1

Warnerwoods Company

	FIFO	LIFO	Average cost	Specific identification
Sales (330 units × $ 87.40 per unit)+(200 units × $ 97.40)	$ 48,322	$ 48,322	$ 48,322	$ 48,322
Less: Cost of goods sold	{(170 units × $ 52.4 per unit)+(160 units × $ 57.4 per unit)} + {(100 units × $ 62.4 per unit)+(100 units × $ 57.4 per unit)} = (18,093+11,980) = ($ 30,073)	{(260 units × $ 57.4 per unit)+(70 units × $ 52.4 per unit)}+{(100 units × $ 52.4 per unit)+(100 units × $ 62.4 per unit)} = (18,529+11,480) = ($ 30,009)	(530 units × $ 59.08 per unit) =($ 31,312)	{(100 units × $ 52.4 per unit)+(230 units × $ 57.40 per unit)} + {(80 units × $ 62.4 per unit)+(120 units × $ 64.4 per unit)} = (18,442+12,720) = ($31,162)
Gross Profit	= 48,322-30,073 = $ 18,249	= 48,322-30,009 = $ 18,313	= 48,322-31,312 $ 17,010	= 48,322-31,162 = $ 17,160

Average cost = total cost of available units / available units

= {(170 units × $ 52.40 per unit)+(260 units × $ 57.40 per unit)+(120 units × $ 62.40 per unit)+(220 units × $ 64.4 per unit)} / 770 Units

= (8,908+14,924+7,488+14,168)/770 units

= $ 45,488/770 units = $ 59.08 per unit