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balandron [24]
3 years ago
13

Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale c

onsisted of 135 units from beginning inventory and 265 units from the March 5 purchase; the March 29 sale consisted of 115 units from the March 18 purchase and 155 units from the March 25 purchase.
Business
1 answer:
ivolga24 [154]3 years ago
3 0

Answer:

gross profit:

  • under FIFO = $21,040
  • under LIFO = $17,930
  • under weighted average = $19,539.79
  • under specific identification = $19,655

Explanation:

Some information was missing, so I looked it up:

Date Activities      Units Acquired        Units Sold at Retail

Mar. 1 Beginning inv. 230 units at $53.60  

Mar. 5 Purchase  290 units at $58.60  

Mar. 9 Sales                                        400 units at $88.60

Mar. 18 Purchase  150 units at $63.60

Mar/ 25 Purchase  280 units at $65.60

Mar. 29 Sales                                       270 units at 90.60

Totals                             950 units                    670 units

ending inventory = 280 units

so COGS:

under FIFO = (230 x $53.60) + (290 x $58.60) + (150 x $63.60) = $38,862

under LIFO = (280 x $65.60) + (150 x $63.60) + (240 x $58.60) = $41,972

under weighted average = ($57,230 / 950) x 670 = $40,362.21

under specific identification = (135 x $53.60) + (265 x $58.60) + (115 x $63.60) + (155 x $65.60) = $40,247

total revenue = (400 x $88.60) + (270 x $90.60) = $35,440 + $24,462 = $59,902

gross profit:

under FIFO = $59,902 - $38,862 = $21,040

under LIFO = $59,902 - $41,972 = $17,930

under weighted average = $59,902 - $40,362.21 = $19,539.79

under specific identification = $59,902 - $40,247 = $19,655

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