Question 19 2 pts When merchandised costs are increasing, which inventory method will produce the lowest...
Question 19 2 pts
When merchandised costs are increasing, which inventory method will produce the lowest gross profit?
| Weighted Average |
| LIFO |
| FIFO |
| Not able to determine |
Homework Answers
answer; LIFO
explanation
1) when merchandise inventory increase the LIFO inventory method will produce higher cost of goods sold and lower GROSS MARGIN
2) if merchandise inventory costs increases automatically cost of goods sold was increased and the result is the lower gross profit
3) FIFO Produces higher gross profit and lower cost of goods sold
Weighted avg method produces the average or moderate gross margin which is in between the FIFO and LIFO
4) according to the FIFO recent materials were issued first so cost of goods sold will increased and gross margin will decreased
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Question 19 2
pts
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Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs 1. Assigns the lowest amount to cost of goods sold 2. Mimics the actual flow of inventory. 3. |Yields the lowest gross profit. 4. Tends to smooth out the erratic changes in costs. 5. Matches the cost of items exactly with the revenues they generate. FIFO Specific identification Weighted average LIFO
method would it choose? P6-29A Accounting for inventory using the perpetual inventory system- FIFO, LIFO, and weighted average, and comparing FIFO, LIFO, and weighted average Steel Mill began August with 50 units of iron inventory that cost $35 each. During August, the company completed the following inventory transactions: 5. Units Unit Cost Unit Sales Price $85 45 Aug. 3 8 Sale Purchase 90 $54 21 Sale 88 30 Purchase 15 58 Requirements 1. Prepare a perpetual inventory record for the...
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Please complete all of P6-29A
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1-6
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