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[The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system....

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

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date Activities Units Acquired at Cost Units Sold at Retail
Mar. 1 Beginning inventory 70 units @ $50.40 per unit
Mar. 5 Purchase 210 units @ $55.40 per unit
Mar. 9 Sales 230 units @ $85.40 per unit
Mar. 18 Purchase 70 units @ $60.40 per unit
Mar. 25 Purchase 120 units @ $62.40 per unit
Mar. 29 Sales 100 units @ $95.40 per unit
Totals 470 units 330 units

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 50 units from beginning inventory and 180 units from the March 5 purchase; the March 29 sale consisted of 30 units from the March 18 purchase and 70 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Solutions

Expert Solution

Amount Per unit Units
01-Mar Beginning inventory 3528 50.4 70
05-Mar Purchases 11634 55.4 210
18-Mar Purchases 4228 60.4 70
25-Mar Purchases 7488 62.4 120
Cost of goods available for sale 26878 470
Average cost 57.19 Less units sold 330
Ending inventory 140
Ending inventory
Average cost 8006 (57.19*140)
FIFO Units Per unit Total
25 mar purchases 120 62.4 7488
18 mar purchases 20 60.4 1208
Total 140 8696
LIFO
1 mar purchases 50 50.4 2520
18 mar purchases 70 60.4 4228
25 mar purchases 20 62.4 1248
Total 140 7996
Specific identification
1 mar purchases 20 50.4 1008
5 mar purchases 30 55.4 1662
18 mar purchases 40 60.4 2416
25 mar purchases 50 62.4 3120
Total 140 8206
Average FIFO LIFO Specific
Cost of goods available for sale 26878 26878 26878 26878
Less Ending inventory 8006 8696 7996 8206
Cost of goods sold 18872 18182 18882 18672
Average FIFO LIFO Specific
Sales 29182 29182 29182 29182
Less Cost of goods sold 18872 18182 18882 18672
Gross profit 10310 11000 10300 10510

ekkarill92 answered 2 months ago
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