Question

Case Defence sells smartphone cases and uses the perpetual inventory system. The following is information on the purchases and sales of “defender box” cases. On October 1, case Defence had 28 units with a unit cost of $22.

Procedures   Sales

Date Units Unit Cost Units Unit Price    Oct. 3   18 23

Oct. 6 23 $58

Oct. 12 28 25

Oct. 19 28 $58

Oct. 23 38 27

Oct. 30 33 $58

. 31 23 28

Required:

1. Calculate the dollar value of cost of goods sold and ending inventory for the month of October using the following methods. a. FIFO b. Moving weighted average. Round all unit costs to two decimal places and round all other numbers to the nearest dollar.

2. Using the calculations in Part 1, complete the following table:

FIFO Moving weighted avg.

Sales……………………………..

Cost of goods sold…………

Gross profit…………………….

3. Does using FIFO or moving weighted average produce a. A higher gross profit? b. A higher ending inventory balance?

4. Calculate the gross profit percentage for FIFO and moving weighted average for the month of October. Round to the nearest percentage.

Answer 1