Question 1

The following information relates to Good Kitchen Ltd.s inventory transactions during the month of March.

				Units		Cost/Unit		Amount
Mar. 1		Beginning inventory		6,200		$19.00		$117,800
7		Sale		4,200
12		Purchase		2,300		$21.00		$48,300
16		Purchase		900		$21.00		$18,900
18		Sale		2,400
27		Purchase		3,900		$26.00		$101,400
29		Sale		3,500

All of the units sold were priced at $64.00 per unit.

Good Kitchen Ltd. uses the perpetual inventory system. Calculate Good Kitchens cost of goods sold, gross margin, and ending inventory for the month of March using FIFO.

Cost of Goods Sold		$
Gross margin		$
Ending Inventory		$

Good Kitchen Ltd. uses the perpetual inventory system. Calculate Good Kitchens cost of goods sold, gross margin, and ending inventory for the month of March using weighted-average. (Round calculations for cost per unit to 2 decimal places, e.g. 10.52 and final answers to 0 decimal places, e.g. 61,052.)

Cost of Goods Sold		$
Gross margin		$
Ending Inventory		$

Which of the cost formulas would produce the higher gross margin? The FIFOweighted-average method results in the higher gross margin.