Use the following information for questions 1–3. At May 1, 2008, Treeline Compan

Question

Use the following information for questions 1–3.

At May 1, 2008, Treeline Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows:

200 units at $7

300 units at $8

The company sold 500 units during the month for $12 per unit. Treeline uses the average cost method.

    1.     The average cost per unit for May is

    2.     The value of Treeline’s inventory at May 31, 2008 is

    3.     Treeline’s gross profit for the month of May is

Explanation / Answer

Calculate average cost per unit :

Average cost per unit = 4400/700 = $6.29 per unit

2) Value of ending inventory = 6.29*200 = $1257

3) Gross profit = 6000-3143 = $2857

Unit Cost Beginning inventory 200 1400 Purchase 200 1400 Purchase 300 1600 Total 700 4400

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.