Question
In: Accounting
Topanga Group began operations early in 2018. Inventory purchase information for the quarter ended March 31,...
Topanga Group began operations early in 2018. Inventory purchase
information for the quarter ended March 31, 2018, for Topanga’s
only product is provided below. The unit costs include the cost of
freight. The company uses a periodic inventory system.
| Date of Purchase | Units | Unit Cost | Total Cost | ||||||
| Jan. 7 | 5,000 | $ | 3.00 | $ | 15,000 | ||||
| Feb. 16 | 26,000 | 4.00 | 104,000 | ||||||
| March 22 | 30,000 | 5.00 | 150,000 | ||||||
| Totals | 61,000 | 269,000 | |||||||
Sales for the quarter, all at $8 per unit, totaled 37,000 units
leaving 24,000 units on hand at the end of the quarter.
Required:
1. Calculate Topanga's cost of goods sold for the
first quarter using:
- FIFO
- LIFO
- Average cost
2. Calculate Toponga's gross profit ratio for
the first quarter using FIFO, LIFO, and Average cost.
3. Comment on the relative effect of each of the
three inventory methods on the gross profit ratio.
Topanga Group began operations early in 2018. Inventory purchase
information for the quarter ended March 31, 2018, for Topanga’s
only product is provided below. The unit costs include the cost of
freight. The company uses a periodic inventory system.
| Date of Purchase | Units | Unit Cost | Total Cost | ||||||
| Jan. 7 | 5,000 | $ | 3.00 | $ | 15,000 | ||||
| Feb. 16 | 26,000 | 4.00 | 104,000 | ||||||
| March 22 | 30,000 | 5.00 | 150,000 | ||||||
| Totals | 61,000 | 269,000 | |||||||
Sales for the quarter, all at $8 per unit, totaled 37,000 units
leaving 24,000 units on hand at the end of the quarter.
Required:
1. Calculate Topanga's cost of goods sold for the
first quarter using:
- FIFO
- LIFO
- Average cost
2. Calculate Toponga's gross profit ratio for
the first quarter using FIFO, LIFO, and Average cost.
3. Comment on the relative effect of each of the
three inventory methods on the gross profit ratio.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Topanga Group began operations early in 2021. Inventory purchase information for the quarter ended March 31,...
Topanga Group began operations early in 2021. Inventory purchase
information for the quarter ended March 31, 2021, for Topanga’s
only product is provided below. The unit costs include the cost of
freight. The company uses a periodic inventory system to report
inventory and cost of goods sold.
Date of Purchase
Units
Unit Cost
Total Cost
Jan. 7
6,000
$
5.00
$
30,000
Feb. 16
15,000
6.00
90,000
March 22
19,000
7.00
133,000
Totals
40,000
$
253,000
Sales for the quarter,...
panga Group began operations early in 2021. Inventory purchase information for the quarter ended March 31,...
panga Group began operations early in 2021. Inventory purchase
information for the quarter ended March 31, 2021, for Topanga’s
only product is provided below. The unit costs include the cost of
freight. The company uses a periodic inventory system to report
inventory and cost of goods sold.
Date of Purchase
Units
Unit Cost
Total Cost
Jan. 7
9,000
$
4.00
$
36,000
Feb. 16
25,000
5.00
125,000
March 22
29,000
6.00
174,000
Totals
63,000
$
335,000
Sales for the quarter,...
Data below for the year ended December 31, 2018, relates to Houdini Inc., which began operations...
Data below for the year ended December 31, 2018, relates to
Houdini Inc., which began operations on January 1, 2018. The retail
price index at the end of 2018 was 1.10.
Cost
Retail
Beginning inventory
$
66,000
$
104,000
Net purchases
280,000
420,000
Net markups
20,000
Net markdowns
40,000
Net sales
375,000
Required: Calculate estimated ending inventory
at cost assuming Houdini uses the Dollar-Value LIFO retail
method.
Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the...
Calculating Weighted-Average Cost Inventory Values
The Brattle Corporation began operations in 2018. Information
relating to the company’s purchases of inventory and sales of
products for 2018 and 2019 is presented below.
2018
March 1 Purchase 220 units @ $12 per unit
June 1 Sold 120 units @ $25 per unit
September 1 Purchase 100 units @ $15 per unit
November 1 Sold 130 units @ $25 per unit
2019
March 1 Purchase 70 units @ $16 per unit
June 1...
Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the...
Calculating Weighted-Average Cost Inventory Values The Brattle
Corporation began operations in 2018. Information relating to the
company’s purchases of inventory and sales of products for 2018 and
2019 is presented below. 2018 March 1 Purchase 220 units @ $12 per
unit June 1 Sold 120 units @ $25 per unit September 1 Purchase 100
units @ $15 per unit November 1 Sold 130 units @ $25 per unit 2019
March 1 Purchase 70 units @ $16 per unit June 1...
Calculating Weighted-Average Cost Inventory Values The Brattle Corporation began operations in 2018. Information relating to the...
Calculating Weighted-Average Cost Inventory Values The Brattle
Corporation began operations in 2018. Information relating to the
company’s purchases of inventory and sales of products for 2018 and
2019 is presented below.
2018
March 1 Purchase 220 units @ $12 per unit
June 1 Sold 120 units @ $25 per unit
September 1 Purchase 100 units @ $15 per unit
November 1 Sold 130 units @ $25 per unit
2019
March 1 Purchase 70 units @ $16 per unit
June 1...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances: ...
Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory Balances:
Beginning
Ending
Work in
Progress
$ 90,000
$ 80,000
Finished
Goods
$ 77,000
$ 67,000
Raw Materials
$ 10,000
$ 30,000
During the year, the budgeted and actual costs were as
follows:
Note
Actual
Raw Materials
1
290,000
Labour
2
518,000
Depreciation Factory Equipment
72,000
Depreciation Office Equipment
24,000
Building Rent
3...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances: ...
Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory Balances:
Beginning
Ending
Work in
Progress
$ 90,000
$ 80,000
Finished
Goods
$ 77,000
$ 67,000
Raw Materials
$ 10,000
$ 30,000
During the year, the budgeted and actual costs were as
follows:
Note
Actual
Raw Materials
1
290,000
Labour
2
518,000
Depreciation Factory Equipment
72,000
Depreciation Office Equipment
24,000
Building Rent
3...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances: ...
Chaos Manufacturing had the following financial information for
the year ended December 31 2018:
Inventory Balances:
Beginning
Ending
Work in
Progress
$
90,000
$ 80,000
Finished
Goods
$
77,000
$ 67,000
Raw Materials
$
10,000
$ 30,000
During the year, the budgeted and actual costs were as
follows:
Note
Actual
Raw Materials
1
290,000
Labour
2
518,000
Depreciation Factory Equipment
72,000
Depreciation Office Equipment
24,000
Building Rent
3...
Chaos Manufacturing had the following financial information for the year ended December 31 2018: Inventory Balances:...
Chaos Manufacturing had the following financial information for
the year ended December 31 2018: Inventory Balances: Beginning
Ending Work in Progress $ 90,000 $ 80,000 Finished Goods $ 77,000 $
67,000 Raw Materials $ 10,000 $ 30,000 During the year, the
budgeted and actual costs were as follows: Note Actual Raw
Materials 1 290,000 Labour 2 518,000 Depreciation Factory Equipment
72,000 Depreciation Office Equipment 24,000 Building Rent 3 100,000
Maintenance – Factory Equipment 40,000 Utilities – Electrical 4
180,000 Utilities...
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