Ans. | *Calculations for Average cost per unit: | ||||||
Available for sale | |||||||
Date | Units | Rate | Total | ||||
01-Oct | 60 | $26.00 | $1,560 | ||||
09-Oct | 135 | $28.00 | $3,780 | ||||
17-Oct | 90 | $29.00 | $2,610 | ||||
25-Oct | 70 | $31.00 | $2,170 | ||||
Cost of goods available for sale | 355 | $10,120 | |||||
Average cost per unit = Total cost of goods available for sale / Total units available | |||||||
$10,120 / 355 | |||||||
$28.507 | per unit | ||||||
Ans. | Calculations for Ending inventory, cost of goods sold, gross profit and gross profit rate: | ||||||
Units sold (90 + 60 + 100) = 250 units | |||||||
Ending inventory units = Units available for sale - Total units sold | |||||||
355 - 250 | |||||||
105 units | |||||||
a | Periodic LIFO: | ||||||
Date | Units | Rate | Total | ||||
01-Oct | 60 | $26.00 | $1,560 | ||||
09-Oct | 45 | $28.00 | $1,260 | ||||
Ending inventory | 105 | $2,820 | |||||
Cost of goods sold = Total cost of goods available for sale - Ending inventory | |||||||
$10,120 - $2,820 | |||||||
$7,300 | |||||||
*In LIFO method the units that have purchased last, are released the first one and the ending inventory | |||||||
units remain from the first purchases. | |||||||
b | Periodic FIFO: | ||||||
Date | Units | Rate | Total | ||||
25-Oct | 70 | $31.00 | $2,170 | ||||
17-Oct | 35 | $29.00 | $1,015 | ||||
Ending inventory | 105 | $3,185 | |||||
Cost of goods sold = Total cost of goods available for sale - Ending inventory | |||||||
$10,120 - $3,185 | |||||||
$6,935 | |||||||
*In FIFO method the units that have purchased first (earliest), are released the first one and the ending inventory | |||||||
units remain from the last (recent) purchases. | |||||||
c | Weighted average cost: | ||||||
Ending inventory = Average cost per unit * Ending inventory units | |||||||
$28.507 *105 | |||||||
$2,993 | |||||||
Cost of goods sold = Total cost of goods available for sale - Ending inventory | |||||||
$10,120 - $2,993 | |||||||
$7,127 | |||||||
LIFO | FIFO | Weighted average | |||||
Sales (a) | $10,800 | $10,800 | $10,800 | ||||
(-) Cost of goods sold | -$7,300 | -$6,935 | -$7,127 | ||||
Gross profit (b) | $3,500 | $3,865 | $3,673 | ||||
Gross profit rate (b/a*100) | 32.4% | 35.8% | 34.0% | ||||
Gross profit rate = Gross profit / Sales * 100 | |||||||
*Calculation of sales: | |||||||
Date | Units | Rate | Total | ||||
11-Oct | 90 | $40.00 | $3,600 | ||||
22-Oct | 60 | $45.00 | $2,700 | ||||
29-Oct | 100 | $45.00 | $4,500 | ||||
Total sales | $10,800 | ||||||
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