Answer:
answer is given below
Explanation:
given data
Date of Purchase Units Units Cost Total Cost
Jan. 7 4,000 $4.00 $16,000
Feb 16 12,000 5.00 60,000
March 22 16,000 6.00 96,000
Totals 32,000 $172,000
solution
we get here for the cost of goods sold and the ending inventory that is
Date Particulars Units (1) Rate (2) Cost (1×2)
7-Jan Purchase 4000 $4 $16,000
16-Feb Purchase 12000 $5 $60,000
March 22 Purchase 16000 $6 $96,000
Total 32,000 $172,000
Sold Units 18,000 0
Ending Inventory 14,000
Weighted average $5.38
rate of purchase
($172,000/32,000)
and
Method
FIFO (a) LIFO (b) Weighted Average (c )
Value of Ending Inventory $84,000 $66,000 $10,990
Cost of goods sold $88,000 $106,000 $161,010
(Total Cost - Ending Inventory)
and
gross profit ratio for the first quarter using FIFO, LIFO, and Average cost is
Method
Particulars FIFO LIFO Weighted Average
Sales (18,000 x $9) $162,000 $162,000 $162,000
Less: Cost of Goods Sold -$88,000 -$106,000 -$161,010
Gross Profit $74,000 $56,000 $990
and
The weighted average method is show that least profit and FIFO method is show you highest profit in the all three method
