Question: Gamma Manufacturing Scenario: Weighted Average Cost Method Data: Beginning Inventory: 1,000 units at $15 per unit Purchases: 3,000 units at $18 per unit Ending Inventory:

  1. Gamma Manufacturing

Scenario: Weighted Average Cost Method

Data:

  • Beginning Inventory: 1,000 units at $15 per unit
  • Purchases: 3,000 units at $18 per unit
  • Ending Inventory: 1,500 units
  • Sales Revenue: $120,000

Requirements:

  1. Calculate the Cost of Goods Sold using the weighted average cost method.
  2. Determine the Cost of Goods Available for Sale.
  3. Analyze the impact of inventory valuation on COGS and profitability.
  4. Discuss how Gamma Manufacturing can improve inventory turnover.
  5. Prepare an income statement highlighting COGS and gross profit.

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