Answer:
Given that
July 1 = 1 unit purchased at $30
July 10 = 1 unit purchased at $33
July 24 = 1 unit purchased at $36
Total cost = $99
Average cost per unit = $33
Assuming sales of 1 unit on July 28 at $47
A. FIFO
gross profit = revenue - cost
= 47 - 30
= $17
Cost of goods = $30
Ending inventory = 99 - 30
= $69
B. LIFO
gross profit = revenue - cost
= 47 - 36
= $11
Cost of goods = $36
Ending inventory = total cost - cost of goods sold
= 99 - 36
= $63
C. Average
Gross profit = revenue - cost
= 47 - 33
= $14
Cost of goods = $33
Ending inventory = 99 - 33
= $66
Answer:
Date Product Total Units Units Cost
July 3 Purchase 1 $30.00
10 Purchase 1 33.00
24 Purchase 1 36.00
Total 3 $99.00
Average cost per unit $33.00
Assume one unit sells on July 28 for $47.00.
Ending Inventory
(a) first-in, first-out, = 1 unit at $ 36+ 1 unit at $ 33= $ 69
(b) last-in, first-out, =1 unit at $ 30+ 1 unit at $ 33= $ 63
(c) average cost flow methods= 2 units at $ 33= $ 66
Cost of Goods Sold
(a) first-in, first-out, = Purchases - FIFO Ending Inventory= $ 99- $ 69= $ 30
(b) last-in, first-out, = Purchases - LIFO Ending Inventory= $ 99- $ 63= $ 36
(c) average cost flow methods= Purchases - Avg Cost Ending Inventory= $ 99- $ 66= $ 33
Gross Profit
(a) first-in, first-out, = Sales - FIFO CGS= $ 47-$ 30= $17
(b) last-in, first-out, = Sales - LIFO CGS= $ 47- $ 36= $11
(c) average cost flow methods= Sales - Avg Cost CGS= $ 47- $ 33= $ 14
