Question

[The following information applies to the questions displayed below.] The following information pertains to Mason Company for 2016: Beginning inventory 144 units @ $ 44 Units purchased 414 units @ $ 66 Ending inventory consisted of 56 units. Mason sold 502 units at $132 each. All purchases and sales were made with cash. Operating expenses amounted to $3,900. 3.value: 3.00 pointsRequired information Required a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.)

Answer 1

ANS
1	Calculation of gross Margin for Mason Company
	Paricular		Amount	Amount	Amount
			Fifo	Lifo	Weighted Average
	Sale		66,264	66,264	66,264
	(502 X 132)
	Less :- Cost of goods sold*		(24,684)	(23,452)	(24,366)
	Less: Operating Expense		(3,900)	(3,900)	(3,900)
	Gross margin		37,680	38,912	37,998
*	Calculation of Cost of goods sold for Mason Company in Case of Fifo method
		Quantity	Rate	Amount
	Opening inventory	144	44	6,336
	Purchases	414	66	27,324
	Closing stock	56	66	3,696
	Cost of goods sold			24,684
	Inventory valuation rate is 66 as in fifo method closing inventory will calculated from last purchase.
*	Calculation of Cost of goods sold for Mason Company in Case of Lifo method
		Quantity	Rate	Amount
	Opening inventory	144	44	6,336
	Purchases	414	66	27,324
	Closing stock	56	44	2,464
	Cost of goods sold			23,452
	Inventory valuation rate is 44 as in lifo method closing inventory will calculated from opening inventory.
*	Calculation of Cost of goods sold for Mason Company in Case of weighted average method
		Quantity	Rate	Amount
	Opening inventory	144	44	6,336
	Purchases	414	66	27,324
	Closing stock	56	60	3,378
	Cost of goods sold			24,366
	Inventory valuation rate is 60 as in weighted average method closing inventory will calculated amount of inventory
	available for sale divided by units inventory available for sale