Answer:
Cost Flow Methods
Gross profit and ending inventory on April 30 using:
Gross Profit Ending Inventory
(a) first-in, first-out (FIFO) $75 $546
(b)
last-in, first-out (LIFO) $71 $542
(c) weighted average cost method $73 $544
Explanation:
a) Data and Calculations:
Item Beta Cost
April 2 Purchase $270
April 15 Purchase 272
April 20 Purchase 274
Total $816
Average cost per unit = $272 ($816/ 3 units)
Assume that one unit is sold on April 27 for $345
Gross profit and ending inventory on April 30 using:
Gross Profit Ending Inventory
(a) first-in, first-out (FIFO) $75 ($345 - $270) $546 ($816 - $270)
(b)
last-in, first-out (LIFO) $71 ($345 - $274) $542 ($816 - $274)
(c) weighted average cost method $73 ($345 - $272) $544 ($816 - $272)
Ending inventory = Cost of goods available for sale Minus Cost of goods sold
Gross profit = Sales Minus Cost of goods sold
Answer:
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Answer:
"Net Present Value" is the right approach.
Explanation:
A method used to determining or calculating the gaps between the current valuation of initial investment as well as the outputs of something like development or possible expenditure is termed as net present value.
The formula which is used to find the NPV is given below:
⇒ 
here,
- i = Return required
- t = No. of periods
Answer:
a. 6.4$
b. 1 600 000$
c. 6 400 000$
Explanation:
First, let's determine <em>net sales</em>. The total sales volume should be multiplied with product price.
Net sales = 250 000*32$ = 8 000 000$
Since we have the gross margin and net sales, we can determine the cost of goods sold (COGS).
COGS = Net Sales - Gross margin
COGS = 8 000 000 - 2 400 000 = 5 600 000$
Now that we have COGS, we can determine the total variable cost:
Total variable cost = COGS - Total fixed cost
Total variable cost = 5 600 000 - 250 000 * 16 = 1 600 000$
So, the variable cost per unit is:
Total variable cost/Number of units = 1 600 000 / 250 000 = 6.4$
Lastly, the total contribution margin is:
Total contribution margin = Sales Revenue - Total variable costs
Total contribution margin = 8 000 000 - 1 600 000 = 6 400 000$
This margin is useful when conducting a break-even analysis and determining the price of the product to be sold.
