Three identical units of Item K113 are purchased during July, as shown below. Item K113 Units Cost
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Question:
Three identical units of Item K113 are purchased during July, as shown below.
Item K113 | Units | Cost | ||
---|---|---|---|---|
July 9 | Purchase | 1 | $138 | |
July 17 | Purchase | 1 | $142 | |
July 26 | Purchase | 1 | $146 | |
Total | 3 | $426 | ||
Average cost per unit | $142 | ($426/3 units) |
Assume that one unit is sold on July 31 for $186.
Determine the gross profit for July and ending inventory on July 31 using the
(a) The method of inventory costing is based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred. first-in, first-out (FIFO);
(b) A method of inventory costing based on the assumption that the most recent merchandise inventory costs should be charged against revenue. last-in, first-out (LIFO); and
(c) weighted average cost methods.
Gross Profit for July | $ |
FIFO | LIFO | Weighted Average Cost Method | |
---|---|---|---|
Ending Inventory | $ | $ | $ |
Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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