Answer:
1. Ending inventory = $3519
2. Cost of Goods Sold = $21030
3. Sales Revenue = $27279
4. Gross Profit = $6249
Explanation:
FIFO method of inventory valuation is whereby the stock that first comes into the business, leaves first. This is common in perishable inventory such as vegetables or fruits.
Jan 1. Beginning inventory: 53 units x $45 = $2385
Total
53 units x $45 = $2385
Apr 7. Purchase 133 units x $47 = $6251
Total
53 units x $45 = $2385
133 units x $47 = $6251
Jul 16. Purchase 203 units x $50 = $10150
Total
53 units x $45 = $2385
133 units x $47 = $6251
203 units x $50 = $10150
Oct 6. Purchase 113 units x $51 = $5763
53 units x $45 = $2385
133 units x $47 = $6251
203 units x $50 = $10150
113 units x $51 = $5763
1. Ending inventory = 502 - 433 = 69 hence,
69 units x $51 = $3519
2. Cost of Goods Sold =
[$2385 + $6251 + $10150 + (44 units x $51)] = $21030
OR $24549 - 3519 = $21030
3. Sales Revenue =
433 units x $63 = $27279
4. Gross Profit = Sales Revenue - Cost of Goods Sold hence,
$27279 - 21030 = $6249
B. Work/life balance so he can spend time with his children
Contribution is the difference between the Sales per unit and the variable cost per unit. When the selling price reduced to $6 per unit,
Contribution per unit = Sales per unit - Variable Cost per unit
Contribution per unit = $6 - ($6*0.6)
Contribution per unit = $2.4 per unit.
Now, the contribution margin ratio = Contribution per unit / Sales per unit
Contribution Margin Ratio = $2.4 / $6
Contribution Margin Ratio = 0.4 or 40%
Contribution Margin ratio when the sales price is $6 per unit is 40%.
Beginning 12,000 + Purchases 170,000 - Ending 15,000 = 167,000 Direct materials used $ 167,000
Innovation is a process of discovering new ways of combining resources
