You are provided with the following information for Najera Inc. for the month ended June 30, 2019. Najera uses the periodic method for inventory.
Calculate cost per unit.
Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.
(1) LIFO
(2) FIFO
(3) Average-Cost
Ending inventory = 90 x $44.44 = $3,999.60
Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.
(1) LIFO
(2) FIFO
(3) Average-Cost
Compare the results for the three cost flow assumptions and answer the following questions.
Thank you!
Calculate cost per unit.
Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.
Ending Inventory in Units:
| ||
| Units available for sale | 250 | |
| Sales (110 - 15 + 65 ) | 160 | |
| Units remaining in ending inventory | 90 | |
Sales Revenue
| |||||||||
Date
|
Units
|
Unit Price
|
Total Sales
| ||||||
| June | 10 | 110 | $70 | $7,700 | |||||
| June | 11 | (15 | ) | 70 | (1,050 | ) | |||
| June | 25 | 65 | 75 | 4,875 | |||||
| 160 | $11,525 | ||||||||
(1) LIFO
Ending inventory
| ||||||
| June 1 |
40
| @ | $40 | = | $1,600 | |
| June 4 | 50 | @ | 44 | = |
2,200
| |
| 90 |
3,800
| |||||
Cost of Goods Sold
| ||
| Cost of goods available for sale |
$11,110
| |
| Less: Ending inventory |
3,800
| |
| Cost of goods sold |
$7,310
| |
Gross profit
| ||
| Sales revenue |
$11,525
| |
| Cost of goods sold |
7,310
| |
| Gross profit |
$4,215
| |
(2) FIFO
Ending inventory
| ||||||||
| June | 28 |
30
| @ | $50 | = | $1,500 | ||
| June | 18 |
45
| @ | $46 | = | 2,070 | ||
| June | 4 |
15
| @ | $44 | = | 660 | ||
90
| $4,230 | |||||||
Cost of Goods Sold
| ||
| Cost of goods available for sale |
$11,110
| |
| Less: Ending inventory |
4,230
| |
| Cost of goods sold |
$6,880
| |
Gross profit
| ||
| Sales revenue |
$11,525
| |
| Cost of goods sold |
6,880
| |
| Gross profit |
$4,645
| |
(3) Average-Cost
Ending inventory = 90 x $44.44 = $3,999.60
Cost of Goods Sold
| ||
| Cost of goods available for sale |
$11,110
| |
| Less: Ending inventory |
3,999.60
| |
| Cost of goods sold |
$7,110.40
| |
Gross profit
| ||
| Sales revenue |
$11,525
| |
| Cost of goods sold |
7,110.40
| |
| Gross profit |
$4,414.60
| |
Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.
(1) LIFO
Gross profit rate
| ||||
Gross profit
|
$4,215
| = | 36.6 % | |
Net Sales
|
$11,525
| |||
(2) FIFO
Gross profit rate
| ||||
Gross profit
|
$4,645
| = | 40.3 % | |
Net Sales
|
$11,525
| |||
(3) Average-Cost
Gross profit rate
| ||||
Gross profit
|
$4,414.60
| = | 38.3 % | |
Net Sales
|
$11,525
| |||
Compare the results for the three cost flow assumptions and answer the following questions.
Thank you!
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