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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

170

units

@ $52.40 per unit

Mar.

5

Purchase

260

units

@ $57.40 per unit

Mar.

9

Sales

330

units

@ $87.40 per unit

Mar.

18

Purchase

120

units

@ $62.40 per unit

Mar.

25

Purchase

220

units

@ $64.40 per unit

Mar.

29

Sales

200

units

@ $97.40 per unit

Totals

770

units

530

units

rev: 07_02_2019_QC_CS-172333

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 100 units from beginning inventory and 230 units from the March 5 purchase; the March 29 sale consisted of 80 units from the March 18 purchase and 120 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Answer is complete but not entirely correct.

	Gross Margin FIFO LIFO Avg. Cost Spec. ID Sales $48,322selected answer correct $48,322 $48,322 $48,322 Less: Cost of goods sold 30,072.00selected answer correct 31,472.00selected answer correct 30,625.60selected answer correct 31,162.00selected answer correct Gross profit $18,250selected answer correct $16,850selected answer correct $17,696selected answer incorrect $17,160selected answer correct

It says my answer to average cost gross profit is not correct!!! I need the answer for this one

Answer 1

In average cost method, ending inventory is calculated based on average cost of goods purchase.
Goods available for sale			Cost of goods sold			Ending inventory
	Quantity	Cost per unit	Quantity	Cost per unit	Total costs	Quantity	Cost per unit	Total costs
Beginning inventory	170	52.40				170	$52.40	$8,908
Purchases	260	57.4				260	$57.40	$14,924
Total						430	$55.42	$23,832
			330	55.42	$18,289	100	$55.43	$5,543
Purchases	120	62.4				120	$62.40	$7,488
Purchases	220	64.4				220	$64.40	$14,168
Total						440	$61.82	$27,199
			200	61.82	$12,364	240	$61.81	$14,835
Total					$30,653
Calculation of gross profit under average costs
Sales revenue	$48,322
Less: Cost of goods sold	$30,653
Gross profit	$17,669
Thus, gross profit is $17,669