Question
In: Accounting
The Soft Touch Company sells leather furniture. The following schedule relates to the company's inventory for...
The Soft Touch Company sells leather furniture. The following schedule relates to the company's inventory for the month of April:
COST SALES
April 1 ---------- Beginning Inventory---------------- 75 units ---------------- $45,000
April 3 ---------- Purchase ------------------------------50 units -----------------$31,250
April 5-----------Sale -------------------------------------30 units-------------------------------------- $33,000
April 11----------Purchase ------------------------------25 units------------------$16,250
April 15 ---------Sale--------------------------------------55 units --------------------------------------$68,750
April 22----------Sale-------------------------------------40 units----------------------------------------$48,000
April 28----------Purchase------------------------------50 units-------------------$33,750
Soft Touch uses the perpetual inventory system
a.) Calculate Soft Touch Company's cost of goods sold, gross margin, and ending inventory using: i.) FIFO ii.) Weighted Average
b.) Which cost formula produced the higher gross margin?
Solutions
Expert Solution
| Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. | |||||||||||
| Part 1: | FIFO | ||||||||||
| Purchase | Sale | Ending Inventory | |||||||||
| Date | Units | Rate | Cost | Units | Rate | Cost | Units | Rate | Cost | ||
| Apr 1 | 75 | $600.000 | $45,000.00 | ||||||||
| Apr 3 | 50 | $625.000 | $31,250 | 75 | $600.000 | $45,000.00 | |||||
| 50 | $625.000 | $31,250.00 | |||||||||
| Apr 5 | 30 | $ 600.000 | $ 18,000 | 45 | $600.000 | $27,000.00 | |||||
| 50 | $625.000 | $31,250.00 | |||||||||
| Apr 11 | 25 | $650.000 | $16,250 | 45 | $600.000 | $27,000.00 | |||||
| 50 | $625.000 | $31,250.00 | |||||||||
| 25 | $650.000 | $16,250.00 | |||||||||
| Apr 15 | 45 | $ 600.000 | $ 27,000 | 40 | $625.000 | $25,000.00 | |||||
| 10 | $ 625.00 | $ 6,250 | 25 | $ 650.00 | $16,250.00 | ||||||
| Apr 22 | 40 | $ 625.00 | $ 25,000 | 25 | $ 650.00 | $16,250.00 | |||||
| Apr 28 | 50 | $675.000 | $33,750 | 25 | $ 650.00 | $16,250.00 | |||||
| 50 | $ 675.00 | $33,750.00 | |||||||||
| Total | $76,250.00 | $50,000.00 | |||||||||
| Endning Inventory | $ 50,000.00 | ||||||||||
| COGS | $ 76,250.00 | ||||||||||
| Sales | $ 149,750 | ||||||||||
| Cost of Goods Sold | $ 76,250 | ||||||||||
| Gross Margin | $ 73,500 | ||||||||||
| Part -2 | Weighted Average | ||||||||||
| Purchase | Sale | Ending Inventory | |||||||||
| Date | Units | Rate | Cost | Units | Rate | Cost | Units | Rate | Cost | ||
| Apr 1 | 75 | $600.000 | $45,000.00 | ||||||||
| Apr 3 | 50 | $625.000 | $31,250 | 125 | $610.000 | $76,250.00 | |||||
| Apr 5 | 30 | $ 610.000 | $ 18,300 | 95 | $610.000 | $57,950.00 | |||||
| Apr 11 | 25 | $650.000 | $16,250 | 120 | $618.333 | $74,200.00 | |||||
| Apr 15 | 55 | $ 618.333 | $ 34,008 | 65 | $618.333 | $40,191.67 | |||||
| Apr 22 | 40 | $ 618.333 | $ 24,733 | 25 | $618.333 | $15,458.33 | |||||
| Apr 28 | 50 | $675.000 | $33,750 | 75 | $656.111 | $49,208.33 | |||||
| Total | $ 77,042 | $49,208.33 | |||||||||
| Endning Inventory | $ 49,208.33 | ||||||||||
| COGS | $ 77,041.67 | ||||||||||
| Sales | $ 149,750 | ||||||||||
| Cost of Goods Sold | $ 77,042 | ||||||||||
| Gross Margin | $ 72,708 | ||||||||||
ekkarill92 answered 2 years agoRelated Solutions
Soft Touch Company sells leather furniture. The following schedule relates to the company’s inventory for the...
Soft Touch Company sells leather furniture. The following
schedule relates to the company’s inventory for the month of
April:
Cost
Sales
April 1
Beginning inventory
72 units
$42,768
3
Purchase
48 units
30,192
5
Sale
27 units
$29,538
11
Purchase
24 units
15,600
15
Sale
59 units
71,803
22
Sale
34 units
39,916
28
Purchase
52 units
35,308
Soft Touch uses the perpetual inventory system.
Calculate Soft Touch Company’s cost of goods sold, gross margin,
and ending inventory using:
i....
Soft Touch Company sells leather furniture. The following schedule relates to the company’s inventory for the...
Soft Touch Company sells leather furniture. The following
schedule relates to the company’s inventory for the month of
April:
Cost
Sales
April 1
Beginning inventory
78 units
$46,566
3
Purchase
53 units
32,754
5
Sale
32 units
$36,096
11
Purchase
26 units
16,744
15
Sale
59 units
76,169
22
Sale
40 units
48,480
28
Purchase
43 units
29,326
Soft Touch uses the periodic inventory system.
New attempt is in progress. Some of the new entries may impact
the last attempt...
Trends by Tiffany sells high-end leather purses. The company has the following inventory transactions for the...
Trends by Tiffany sells high-end leather purses. The company has
the following inventory transactions for the year.
Date
Transaction
Units
Cost
Total Cost
Jan. 1
Beginning inventory
20
$500
$
10,000
Apr. 9
Purchase
30
520
15,600
Oct. 4
Purchase
11
550
6,050
61
$
31,650
Jan. 1−Dec. 31
Sales
52
Because trends in purses change frequently, Trends by Tiffany
estimates that the remaining nine purses have a net realizable
value...
Saddlery Company sells leather saddles and equipment for horse enthusiasts. Saddlery uses the perpetual inventory system....
Saddlery Company sells leather saddles and equipment for horse
enthusiasts. Saddlery uses the perpetual inventory system. The
following schedule relates to the company’s inventory for the month
of May:
Cost
Sales
May 1
Beginning inventory
150 units
$90,000
5
Sale
100 units
$78,000
9
Purchase
50 units
$33,000
13
Purchase
200 units
$144,000
24
Sale
200 units
$168,000
27
Sale
50 units
$48,000
30
Purchase
75 units
$59,400
Calculate Saddlery Company’s cost of goods sold, gross margin,
and ending inventory...
The Converting Department of Soft Touch Towel and Tissue Company had 1,000 units in work in...
The Converting Department of Soft Touch Towel and Tissue Company
had 1,000 units in work in process at the beginning of the period,
which were 60% complete. During the period, 20,800 units were
completed and transferred to the Packing Department. There were
1,120 units in process at the end of the period, which were 70%
complete. Direct materials are placed into the process at the
beginning of production.
Determine the number of equivalent units of production with
respect to direct...
Equivalent Units of Production The Converting Department of Soft Touch Towel and Tissue Company had 640...
Equivalent Units of Production
The Converting Department of Soft Touch Towel and Tissue Company
had 640 units in work in process at the beginning of the period,
which were 60% complete. During the period, 13,600 units were
completed and transferred to the Packing Department. There were 720
units in process at the end of the period, which were 30% complete.
Direct materials are placed into the process at the beginning of
production.
Determine the number of equivalent units of production...
Equivalent Units of Production The Converting Department of Soft Touch Towel and Tissue Company had 1,200...
Equivalent Units of Production
The Converting Department of Soft Touch Towel and Tissue Company
had 1,200 units in work in process at the beginning of the period,
which were 75% complete. During the period, 25,200 units were
completed and transferred to the Packing Department. There were
1,360 units in process at the end of the period, which were 70%
complete. Direct materials are placed into the process at the
beginning of production.
Determine the number of equivalent units of production...
Equivalent Units of Production The Converting Department of Soft Touch Towel and Tissue Company had 760...
Equivalent Units of Production
The Converting Department of Soft Touch Towel and Tissue Company
had 760 units in work in process at the beginning of the period,
which were 70% complete. During the period, 16,000 units were
completed and transferred to the Packing Department. There were 840
units in process at the end of the period, which were 60% complete.
Direct materials are placed into the process at the beginning of
production.
Determine the number of equivalent units of production...
Plata Company produces two products: a mostly handcrafted soft leather briefcase sold under the label Maletin...
Plata Company produces two products: a mostly handcrafted soft
leather briefcase sold under the label Maletin Elegant and a
leather briefcase produced largely through automation and sold
under the label Maletin Fina. The two products use two overhead
activities, with the following costs: Setting up equipment $ 6,000
Machining 19,000 The controller has collected the expected annual
prime costs for each briefcase, the machine hours, the setup hours,
and the expected production. Elegant Fina Direct labor $9,000
$3,000 Direct materials...
The following information relates to the inventory transactions of Thames Company for 2018. January 1 Beginning...
The following information relates to the inventory
transactions of Thames Company for 2018.
January 1 Beginning inventory, 90 units @ $75/unit
March 8 Purchased 160 units @ $80/unit
October 24 Purchased 100 units @ $90/unit
On August 19, the Company sold 225 units at a selling price of
$115/unit
A. Number of units remaining in ending inventory.
B. Compute the cost of goods sold and ending inventory under
each of the following methods:
LIFO
FIFO
Weighted average cost
C. Determine...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 17. The lengths of a population of certain HULU shows I watch are normally distributed with...
- Q5. The information below provides details of an off-exchange tailor-made loan obtained by Royal Oceania Cruises...
- XYZ Ltd. has developed a new product which is expected to have a life of five...
- 1- Identify and describe the categories and models of intrusion detection and prevention systems. 2- Define...
- You are the manager of a Tim Hortons coffee shop. Describe precisely and using examples how...
- Part A It takes 47.0 J to raise the temperature of an 9.50 g piece of...
- What is the duration of a 2-year bond that pays a coupon of 8% per annum...
ADVERTISEMENT