Question

You have the following information for Novak Corp. for the month ended October 31, 2022. Novak uses a periodic method for inventory.

Date		Description		Units		Unit Cost or Selling Price
Oct. 1		Beginning inventory		60		$24
Oct. 9		Purchase		140		26
Oct. 11		Sale		95		45
Oct. 17		Purchase		95		270
Oct. 22		Sale		60		50
Oct. 25		Purchase		70		29
Oct. 29		Sale		105		50

Calculate the weighted-average cost. (Round answer to 3 decimal places, e.g. 5.125.)

Calculate ending inventory, cost of goods sold, gross profit under each of the following methods.

(1) LIFO.
(2) FIFO.
(3) Average-cost. (Round answers to 0 decimal place, e.g. 125.)

Calculate gross profit rate under each of the following methods.

(1) LIFO.
(2) FIFO.
(3) Average-cost. (Round answers to 1 decimal place, e.g. 51.2%)

Answer 1

Date	Description	Units	Unit Cost	Total Cost
Oct. 1	Beginning inventory	60	$24	$1,440
Oct. 9	Purchase	140	26	$3,640
Oct. 17	Purchase	95	27	$2,565
Oct. 25	Purchase	70	29	$2,030
Goods available for sale		365		$9,675
Weighted average cost per unit (32760/365)				$26.507

Date	Description	Units	Selling Price	Total Sales
Oct. 11	Sale	95	45	$4,275
Oct. 22	Sale	60	50	$3,000
Oct. 29	Sale	105	50	$5,250
	Total	260		$12,525

Ending inventory Units (365-260)	105
Ending inventory	Amount
LIFO (60*24+45*26)	$ 2,610
FIFO (70*29+35*27)	$ 2,975
Average-cost (105*26.507)	$ 2,783
Cost of Goods Sold	Amount
LIFO (9675-2610)	$ 7,065
FIFO (9675-2975)	$ 6,700
Average-cost (9675-2783.24)	$ 6,892
Gross Profit	Amount
LIFO (12525-7065)	$ 5,460
FIFO (12525-6700)	$ 5,825
Average-cost (12525-6891.76)	$ 5,633
Gross Profit Rate
LIFO (5460/12525)	43.59%
FIFO (5825/12525)	46.51%
Average-cost (5633.24/12525)	44.98%