Required information

Skip to question

[The following information applies to the questions displayed below.]

The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:

January 20	Purchased 400 units @ $8 =	$ 3,200
April 21	Purchased 150 units @ $10 =	1,500
July 25	Purchased 200 units @ $12 =	2,400
September 19	Purchased 100 units @ $14 =	1,400

During the year, The Shirt Shop sold 650 T-shirts for $19 each.

b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.