Basis Furniture Ltd. uses a perpetual inventory system and has a beginning inventory, as at June 1, of 500 bookcases at a cost of $125 each. During June, the company had the following purchases and sales of bookcases:

Instructions
(a) Determine the cost of goods sold and the cost of the ending inventory using the average cost method. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
(b) Calculate Basis Furniture's gross profit and gross profit margin for the month of June.
(c) Is the gross profit determined in part (b) higher or lower than it would be if Basis Furniture had used FIFO? Explain.

Transcribed Image Text:

Purchases Sales Date Unit Cost Units June 6 10 14 16 26 1,200 1,800 1,000 $127 128 129 Unit Price $200 205