Question 1
Question 2
rev: 06_12_2018_QC_CS-128971
If the company uses the weighted-average inventory cost flow method, what is the average cost per unit (rounded) for May?
What is the amount of cost of goods sold assuming the LIFO cost flow method?
What is the amount of ending inventory assuming the FIFO cost flow method?
What is the amount of gross margin assuming the weighted-average inventory cost flow method? (Round your intermediate calculations to two decimal places.)
What is the amount of gross margin assuming the FIFO cost flow method?
Question 3
1.Determine the weighted average cost per unit (rounded) for May.
A.$4.45
B.$4.50
C.$5.12
D.$6.34
2.Determine the amount of ending inventory assuming the FIFO cost flow method.
A.$480
B.$440
C.$400
D.$940
3.Determine the amount of gross margin assuming the FIFO cost flow method.
A.$2,920
B.$3,420
C.$3,000
D.$4,020
Answer to question 1
Answer to question 2
1) average cost per unit (rounded) for May –
(600*2.8)+(700*3)+(900*3.1)+(500*3.2)/(600+700+900+500) = 3.03
2) amount of cost of goods sold assuming the LIFO cost flow method –
(500*3.2)+(900*3.1)+(700*3) = 6490
3) amount of gross margin assuming the weighted-average inventory cost flow method –
(2100*4.7)-(2100*3.03) = 3507
4) amount of gross margin assuming the FIFO cost flow method –
(2100*4.7) – (600*2.8)+(700*3)+(800*3.1) = 3610
Answer to question 3
Solution 1:
Weighted average cost per unit = [(100*$4) + (300*$4.40)+ (500*$4.60) + (100*$4.80)] / (100+300+500+100)
= $4.50
Hence option B is correct.
Solution 2:
Ending inventory using FIFO method consist of 100 unit of third purchase = 100*$4.80 = $480
Hence option A is correct.
Solution 3:
Gross margin = Sales – COGS = (900*$7.80) – ($4,500 – $480) = $3,000
Hence option C is correct.