Question 2

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

				Units		Cost/Unit		Amount
Mar. 1		Beginning inventory		6,300		$20.00		$126,000
7		Sale		3,800
12		Purchase		2,800		$22.00		$61,600
16		Purchase		900		$22.00		$19,800
18		Sale		2,800
27		Purchase		3,700		$27.00		$99,900
29		Sale		4,000

All of the units sold were priced at $68.00 per unit.

Good Kitchen Ltd. uses the periodic 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 periodic 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? FIFOweighted-average produces the higher gross margin.