On 1 November 2019, JS Company held 300 units of finished goods in inventory. The company use perpetual inventory system. These were valued at RM12 each. During November 2019 three batches of finished goods were received into store from the production department, as follows:

 

  Date           Units received            Production cost per unit

10 November       400 RM12.50

20 November       400RM14

25 November       400RM15

Goods sold out of inventory during November were as follows:

  Date            Units sold            Sale price per unit

14 November      500     RM20

21 November     500RM20

28 November     100RM20

Required:

Determine the gross profit from selling inventory in November 2019, applying the following principles of inventory valuation:

(a)   FIFO

(b)  Average cost

Answer rating: 100% (QA)

Gross profit FIFO Sales 1100 x RM20 RM22000 Cost of goods sold RM14500 Gross ... View the full answer