Answer:
Oct. 1 Beginning inventory 55 26 = $1,430
Oct. 9 Purchase 130 28 = $3,640
Oct. 17 Purchase 95 29 = $2,755
Oct. 25 Purchase 65 31 = $2,015
totals 345 units, $28.522 per unit, $9,840
a) $28.522 per unit
b) FIFO
COGS = (55 x $26) + (130 x $28) + (70 x $29) = $7,100
Ending inventory = $2,740
Gross profit = (95 x $45) + (55 x $50) + (105 x $50) - $7,100 = $5,175
LIFO
COGS = (65 x $31) + (95 x $29) + (95 x $28) = $7,430
Ending inventory = $2,410
Gross profit = (95 x $45) + (55 x $50) + (105 x $50) - $7,430 = $4,845
Average cost
COGS = 255 x $28.522 = $7,273
Ending inventory = $2,567
Gross profit = $5,002
c) gross profit margin
FIFO = $7,100 / $12,275 = 57.8%
LIFO = $7,430 / $12,275 = 60.5%
Average = $7,273 / $12,275 = 59.3%
