24 Purchased 20 units at $8.25 cach Available for sale during December 165 $805

Question

24 Purchased 20 units at $8.25 cach Available for sale during December 165 $805 100 units on hand. The 75 units sold created revenue of $13 each. Determine the At the end of December, Wild Optics had 25 units amounts for the December 31 ending inventory, the cost of goods sold for December, and the gross for each of the inventory costing methods listed below. margin for December Ending Inventor Cost of Goods Sold Gross Profit a. Weighted average b. FIFO C. LIFO ht Gengage Learning. Powered by Cognero

Explanation / Answer

Available for sale   100 units            $ 805 Less: Purchase of 20 units @ 8.25 each       $ 165 Beginning Inventory 80 units   $ 640 (805-165) ( i.e. $ 8 per unit) Weighted Average: Total units   = 100 units Units Sold    = 75 units Ending inventory 25 units Average cost per unit = total cost of goods available/ total units = 805 /100 = $ 8.05 per unit Ending inventory = 25 units @ 8.05 = $ 201.25 Cost of Goods sold = Total cost vailable -Ending inventory cost = 805 - 201.25 = $ 603.75 Sales (75 units @13) = $ 975 Gross Profit = Sales- COGS = 975-603.75 = $ 371.25 FIFO: Total units   = 100 units Units Sold    = 75 units Ending inventory 25 units Ending inventory value = 20 units@8.25 and remaning 5 units@ 8.00 = 165+40 = $ 205 Cost of Goods sold = Total cost vailable -Ending inventory cost = 805 - 205 = $ 600 Sales (75 units @13) = $ 975 Gross Profit = Sales- COGS = 975-600 = $ 375 LIFO Total units   = 100 units Units Sold    = 75 units Ending inventory 25 units Ending inventory value = 25 units@ 8 = $ 200 Cost of Goods sold = Total cost vailable -Ending inventory cost = 805 - 200 = $ 605 Sales (75 units @13) = $ 975 Gross Profit = Sales- COGS = 975-605 = $ 370 Ending Inventory COGS Gross Profit Weighted Average 201.25 603.75 371.25 FIFO 205 600 375 LIFO 200 605 370

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