Question

Question 156 pts

Chipiona Company has the following purchase and sales data.

Note: There was no inventory before the purchase made on January 1.

Purchased on January 1 – 50 units, $9 cost per unit

Purchased on January 16 – 150 units, $8 cost per unit

Purchased on January 25 – 200 units, $7 cost per unit

Sold on January 31 – 225 units, $15 selling price per unit

Assume that the company uses FIFO. Compute GROSS MARGIN for January.

Group of answer choices

$1,550

$1,225

$1,775

$1,334

$1,825

$1,600

Answer 1

Correct answer--------------$1,550

Working

	Units	Cost per unit	value
Beginning Balance			$ 0
Purchases
	50	$                     9.00	$ 450
	150	$                     8.00	$ 1,200
	200	$                     7.00	$ 1,400
Cost of goods available for sale	400		$ 3,050

.

FIFO
Total Units Available for sale		400
Units Sold		225
Closing Stock in Units		175
Valuation
Ending Inventory	175	@	$               7.00	$ 1,225
	0	@	$             24.00	$ 0
Value Of Ending Inventory				$ 1,225
Cost of Goods sold	3050 minus 1225			$ 1,825

.

	FIFO
Sales revenue	$                 3,375
Cost of Goods Sold	$                 1,825
Gross profit	$                 1,550