During 2017, Fresh Express Company sold 2,480 units of its product on September

Question

During 2017, Fresh Express Company sold 2,480 units of its product on September 20 and 2,900 units on December 22, all at a price of $88 per unit. Incurring operating expenses of $16 per unit sold, it began the year with and made successive purchases of the product as follows:

Required:

Prepare a comparative income statement for the company, showing in adjacent columns the profits earned from the sale of the product, assuming the company uses a perpetual inventory system and prices its ending inventory on the basis of (a) FIFO and (b) Moving weighted average: (Round "Cost per unit" to 2 decimal places. Round your intermediate calculations and final answers to 2 decimal places.)

Please calcualte the required fields.

January 1 beginning inventory 580 units S 33 per unit Purchases February 20 May 16 December 11 ,480 units $ 35 per unit 680 units $39 per unit 3,280 units $40 per unit Total 6,020 units

Explanation / Answer

As per the weighted average cost............

Weighted average cost per unit of sale of 20 September =

((580*33)+(1480*35)+(680*39))/(580+1480+680)

= 35.57 per unit

No. Of units on 20 September after sale = 2740-2480 = 260 units

Weighted average cost of sale of 22 December =

((260*35.57)+(3280*40))/(260+3280)

= 39.68 per unit

Total weighted average cost = (2480*35.57)+(2900*39.68)

= 203286

Cost of goods sold = 203286

Gross profit = 270154

Profit = 184074

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

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