Three identical units of merchandise were purchased during March, as follows:\begin{tabular}{rlcr} & Steele Plate & Units & Cost \\\hline Mar. 3 & Purchase & 1 & $830 \\10 & Purchase & 1 & 840 \\19 & Purchase & 1 & 880 \\\cline { 2 - 3 } & Total & 3 & $2,550 \\\hline\end{tabular}Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory on March 31 using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.\begin{tabular}{lll} & Gross Profit & Ending Inventory \\\hline a. First-in, first-out (FIFO) & $□ \\b. Last-in, first-out (LIFO) & $□ \\c. Weighted average cost & $□\end{tabular}
Q. Three identical units of merchandise were purchased during March, as follows:\begin{tabular}{rlcr} & Steele Plate & Units & Cost \\\hline Mar. 3 & Purchase & 1 & $830 \\10 & Purchase & 1 & 840 \\19 & Purchase & 1 & 880 \\\cline { 2 - 3 } & Total & 3 & $2,550 \\\hline\end{tabular}Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory on March 31 using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.\begin{tabular}{lll} & Gross Profit & Ending Inventory \\\hline a. First-in, first-out (FIFO) & $□ \\b. Last-in, first-out (LIFO) & $□ \\c. Weighted average cost & $□\end{tabular}
Calculate gross profit FIFO: Calculate gross profit using FIFO (First-in, First-out). The first unit bought for $830 is sold for $1,125. Gross Profit = Selling Price - Cost Price Gross Profit = $1,125−$830 Gross Profit = $295
Calculate ending inventory FIFO: Calculate ending inventory using FIFO. The last two units remain, one bought for $840 and one for $880. Ending Inventory = $840+$880 Ending Inventory = $1,720
Calculate gross profit LIFO: Calculate gross profit using LIFO (Last-in, First-out).The last unit bought for $880 is sold for $1,125.Gross Profit = Selling Price - Cost PriceGross Profit = $1,125−$880Gross Profit = $245
Calculate ending inventory LIFO: Calculate ending inventory using LIFO.The first two units remain, one bought for $830 and one for $840.Ending Inventory = $830+$840Ending Inventory = $1,670
Calculate weighted average cost: Calculate the weighted average cost per unit.Total Cost = $830 + $840 + $880Total Cost = $2,550Total Units = 3Weighted Average Cost = Total Cost / Total UnitsWeighted Average Cost = $2,550 / 3Weighted Average Cost = $850
Calculate gross profit weighted average: Calculate gross profit using weighted average cost.Gross Profit = Selling Price - Weighted Average CostGross Profit = $1,125 - $850Gross Profit = $275
Calculate ending inventory weighted average: Calculate ending inventory using weighted average cost.Two units remain, each at the weighted average cost of $850.Ending Inventory = 2×$850Ending Inventory = $1,700
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