Answer:
a. Gross Profit =$89, Ending Inventory = $640
b. Gross Profit =$83, Ending Inventory = $631
c. Gross Profit =$86, Ending Inventory = $634
Explanation:
FIFO
<u>a.Gross Profit</u>
Sales ( 1 unit × $403) $403
Less Cost of Sales ( 1 unit × $314) ($314)
Gross Profit $89
<u>b. Ending Inventory</u>
Ending Inventory = Units Left × Earliest Price
= 2 units × $320
= $640
LIFO
<u>a.Gross Profit</u>
Sales ( 1 unit × $403) $403
Less Cost of Sales ( 1 unit × $320) ($320)
Gross Profit $83
<u>b. Ending Inventory</u>
Ending Inventory : 1 unit × $314 = $314
1 unit × $317 = $317
Total = $631
Weighted Average Cost method
<u>a.Gross Profit</u>
Sales ( 1 unit × $403) $403
Less Cost of Sales ( 1 unit × $317) ($317)
Gross Profit $86
<u>b. Ending Inventory</u>
Ending Inventory = Units Left × Average Price
= 2 units × $317
= $634
