Question

If Dave’s Doors uses the First-in First-out (FIFO) costing system, it is assumed that the first units “available for sale” are the first units sold. Therefore, Dave’s will sell its beginning inventory first, then units that they purchased on 9/4, and then on 9/12 until they have accounted for the 45 units sold. Use the table for Dave’s FIFO Costing to complete the requirements below.

	Dave’s FIFO Costing
		Number of units	Cost per unit	Total Costs
Beginning Inventory – Sold First
Purchase made 9/4
Purchase made 9/12
Purchase made 9/18 – Sold Last
Total units sold		45 units sold

Since the 45 units sold is more than the 24 in beginning inventory, we know that all 24 of the units in inventory were sold. Include the units, cost per unit and Total Costs for beginning inventory in the table above. Use the data in your table from 6) above.

How many doors would Dave’s have sold from the units they purchased on 9/4? _______ Include the units, Cost per unit and Total costs for this row in the table above.

Complete the table determining how many units from each purchase Dave’s would have sold until the total equals the 45 units. Total the column “Total Costs” Hint: The number of units for the 9/18 purchase will be less than the total number purchased on that date.

Write the journal entry to record Dave’s expense.

Assume Dave’s sold these doors to customers for $480 each. Write the journal entry to record Dave’s revenue.

What is Dave’s Gross Margin for the period under the FIFO costing method?

The value of ending inventory can be determined 2 ways. The first method is to subtract the COGS calculated from the “Cost of Goods Available for Sale”.

Cost of Goods Available for Sale           ______________ (2) from Table in 6)

minus COGS                                       - ______________ from 8d)

equals Ending Inventory                        ______________

The other method is to use the number of units in ending inventory and assign costs from the most recent purchases until the number of units have been accounted for. Here, we can assume that all these units come from the purchases made on 9/18. Calculate the ending inventory balance.

# of units in inventory   times   cost per unit (from 9/18 purchase) = ending inventory

   _____________             X              _____________           =      _______________

More Info here: https://www.chegg.com/homework-help/questions-and-answers/cost-per-unit-items-purchased-easily-determined-using-purchase-records-assigning-cost-per--q26337761

Answer 1