Question
McAdams Company had the following inventory cost values for one item of inventory for April: Date Activity Units Purchased Cost/Unit Total Cost Apr. 1 BI
McAdams Company had the following inventory cost values for one item of inventory for April:
Date | Activity | Units Purchased | Cost/Unit | Total Cost |
Apr. 1 | BI | 400 | $14 | $5,600 |
Apr. 8 | Purchase | 2,200 | 16 | 35,200 |
Apr. 25 | Purchase | 600 | 18 | 10,800 |
Apr. 30 | Purchase | 800 | 20 | 16,000 |
Available for sale: Units purchased = 4,000; Total cost = $67,600
Sales Activity:
Apr. 19.....1,200 units
Apr. 26.....1,400 units
Units sold = 2,600
Units remaining in EI
Available for sale..........4,000 units
Units sold.....................2,600
Ending inventory in units.....1,400
Instructions
Determine both Ending Inventory (EI) and Cost of Goods Sold (COGS) under each of the following methods and then calculate gross profit under each, assuming that the selling price per unit was $25 for all units sold.
Method | EI | COGS | Gross Profit |
FIFO, periodic | 10,800 + 16,000 = 26,800 | 67600 - 26,800 = 40,800 | 65,000 - 40,800 = 24,200 |
FIFO, perpetual | 26,800 | 40,800 | 24,200 |
LIFO, periodic | 5,600 + 16,000 = 21,600 | 35,200 + 10,800 = 46,000 | 65,000 - 46,000 = 19,000 |
LIFO, perpetual | ???(enter formula, not just answers) | ??? | ??? |
Weighted-average | 16.90 * 1,400 = 23,660 | 16.90 * 2,600 = 43,940 | 65,000 - 43,940 = 21,060 |
Moving- average | ???? (enter formula, not just answers) | ???? | ???? |
Weighted-average cost per unit = 67,600/4,000 = $16.90
Sales Revenue = 2,600 units sold * 25 = 65,000
Sales revenue - COGS = Gross Profit
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