Soft Touch Company sells leather furniture. The following schedule relates to the company’s inventory for the...

Soft Touch Company sells leather furniture. The following schedule relates to the company’s inventory for the month of April:

			Cost	Sales
April 1	Beginning inventory	78 units	$46,566
3	Purchase	53 units	32,754
5	Sale	32 units		$36,096
11	Purchase	26 units	16,744
15	Sale	59 units		76,169
22	Sale	40 units		48,480
28	Purchase	43 units	29,326

Soft Touch uses the periodic inventory system.

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.

Calculate Soft Touch Company’s cost of goods sold, gross margin, and ending inventory using:
i. FIFO
ii. Weighted-average
(Round calculations for cost per unit to 2 decimal places, e.g. 10.52. Round answers under weighted-average to 2 decimal places, e.g. 61,052.79.)

		Cost of Goods Sold	Gross Margin	Ending Inventory
i.	FIFO	$Enter a dollar amount.	$Enter a dollar amount.	$Enter a dollar amount.
ii.	Weighted-average	$Enter a dollar amount rounded to 2 decimal places.	$Enter a dollar amount rounded to 2 decimal places.	$Enter a dollar amount rounded to 2 decimal places.

Question Part Score

35/70

Partially correct answer iconYour answer is partially correct.

Which cost formula produced the higher gross margin ratio? (Round answers to 2 decimal places, e.g. 61.05%.)

		Gross Margin Ratio
FIFO		Enter percentages rounded to 2 decimal places. %
Weighted-average		Enter percentages rounded to 2 decimal places. %

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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Subjects

FIFO METHDO - PERIODICAL
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	CLOSING STOCK
Date	Particulars	Units	Cost Per unit	Total	Units	Cost Per unit	Cost of Goods Sold	Units	Cost Per unit	Ending inventory
Apr.01	Beginning Inventory	78	$ 597.00	$ 46,566	78	$ 597.00	$ 46,566
Apr.03	Purchases	53	$ 618.00	$ 32,754	53	$ 618.00	$ 32,754
Apr.11	Purchases	26	$ 644.00	$ 16,744				26	$ 644.00	$ 16,744
Apr.28	Purchases	43	$ 682.00	$ 29,326				43	$ 682.00	$ 29,326
	Total Goods Available For sale	200		$ 125,390	131		$ 79,320	69		$ 46,070


WEIGHTED AVERAGE - PERIODICAL
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	CLOSING STOCK
Date	Particulars	Units	Cost Per unit	Total	Units	Cost Per unit	Cost of Goods Sold	Units	Cost Per unit	Ending inventory
Apr.01	Beginning Inventory	78	$ 597.00	$ 46,566
Apr.03	Purchases	53	$ 618.00	$ 32,754
Apr.11	Purchases	26	$ 644.00	$ 16,744
Apr.28	Purchases	43	$ 682.00	$ 29,326
	Total Goods Available For sale	200	626.95	$ 125,390	131	626.95	$ 82,130	69	626.95	$ 43,260


	Caclulation of Gross Margin and Gross Margin Ratio
		FIFO	Weighted Average
	Sales	$ 160,745	$ 160,745
	Less: Cost of Goods Sold	$ 79,320	$ 82,130
	Gross Margin	$ 81,425	$ 78,615
	Gross Margin Rate	50.65%	48.91%

Answer =
		Cost of Goods Sold	Gross Margin	Ending inventory

	1- Fifo	$ 79,320	$ 81,425	$46,070

	2- Weighted Average	$ 82,130	$ 78,615	$43,260


Answer =
	FIFO Method produces the higher gross Margin ratio