question 12. the answer is \"weighted average \" but how was the selling price c

Question

question 12.

the answer is "weighted average " but how was the selling price computed?

I1. Assuming that perpetual inventory records are kept in units on ly, the endg perpetual inventory records are kept in units only, the ending inventory on a LIFO basis is A) $4,110. B) $4,160. C) $4,290. D) $4,470. 12. Milford Company had 500 units of "Tank" in its inventory at a cost of $4 each. It purchased, for $2,800, 300 more units of Tank". Milford then sold 400 units at a selling price of $10 each, resulting in a gross profit of $1,600. The cost flow assumption used by Johnson A) is FIFO. B) is LIFO C) is weighted average. D) cannot be determined from the information given. 13. Opera Corp, uses the dollar-value LIFO method of computing its inventory cost. Data 13. Opera Corp. uses the dollar-value I for the past four years is as follows:

Explanation / Answer

Opening inventory = 500 units × 4 = $2000

Purchases = 300 units × 9.33 = 2800

Total = 800 units = $4800

Weighted cost of purchases = 4800 / 800 = 6 per unit

Gross profit on sale of 400 units = $1600 ,

gross profit per unit = 1600 / 400 = $4

Hence , sale price = cost price + markup ( gross profit)

=$ 6 + 4

=$10

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