Question

Widget Tek’s original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Tek’s main product for March.

Date	Inventory
	Quantity	Unit Cost	Total Cost
Mar. 1	850	$98.00	$83,300
	1,275	95.00	121,125
Mar. 8	650	98.00	63,700
Mar. 11	325	98.00	31,850
Mar. 14	325	98.00	31,850
	780	103.00	80,340
Mar. 22	260	98.00	25,480
Mar. 25	260	98.00	25,480
	2,000	104.00	208,000

Study the inventory record for March and answer the questions that follow.

1.	Assuming that the product sells for $155 and that 80% of sales are on account, determine the gross profit from sales for March.
2.	Making the same assumptions as in (1), determine the ending inventory cost for March.
3.	Which inventory method is being used?

Answer 1