Question

The following pertain to the cost of H’s only inventory item:

• Inventory on hand, January 1                                                10 units @ $  9 per unit
• Purchases, January 2                                                             150 units @ $14 per unit
• Purchases, January 12                                                         195 units @ $15 per unit
• Purchases, January 16                                                           75 units @ $15 per unit
• Purchases, January 20                                                            50 units @ $16 per unit
• Purchases, January 26                                                          205 units @ $19 per unit

685

Sales during January totaled 615 units. Each unit sold for $40.

Calculate COGS AND GP for January AND EI as of 01-31 under the following assumptions:

• H uses periodic LIFO

EI:                                                                                   

COGS:                                                                           

Gross profit:                                                                  

• H uses periodic FIFO

EI:                                                                                   

COGS:                                                                           

Gross profit:                                                                  

• H uses a weighted average method and rounds the unit cost to the nearest penny.

EI:                                                                                   

COGS:                                                                           

Gross profit:                                                                  

Make sure that the sum of your COGS AND EI answers add up to 100% of your COGAS.

Answer 1

Sales = $615 x40 = $24600

Cost of goods sold = $10005

Gross profit = $24600 - 10005 = $14595

2)

Sales = $615 x40 = $24600

Cost of goods sold = $9605

Gross profit = $24600 - 9605 = $14995

3)

Sales = $615 x40 = $24600

Cost of goods sold = $9815.40

Gross profit = $24600 - 9815.40 = $14784.60