Practice on FIFO, LIFO and Weighted Average Tom’s Wear has 250 T-shirts remaining from last year (2019) at $4 unit cost and for this year he had made a few batches of purchases of T-shirts for his business. Generally the T-Shirts are generic from what he has been selling with only minor variations in colours and printed designs. On 5th January 2020, Tom bought a batch of 550 T-shirts at $3.80 unit cost. Now,he has 800 T-shirts in his warehouse, ready for business. On 6 February 2020, due to upcoming CNY, he managed to sell off 700 T-shirts and he has decided to order more from the supplier. This time, he ordered another 800 T-shirts but the cost price has risen to $4.50 per unit. Tom’s Wear managed to sell all of his T-shirts by the end of June 2020. He’s not going to re-order for the time being. All the while, Tom’s Wear is selling the T-shirts at $10 per piece. Calculate: How the inventory cost is calculated for each sale Calculate how much are the sales revenue and profit earned by the sales of T-shirts in 2020
Practice on FIFO, LIFO and Weighted Average
Tom’s Wear has 250 T-shirts remaining from last year (2019) at $4 unit cost and for this year he had made a few batches of purchases of T-shirts for his business. Generally the T-Shirts are generic from what he has been selling with only minor variations in colours and printed designs.
On 5th January 2020, Tom bought a batch of 550 T-shirts at $3.80 unit cost. Now,he has 800 T-shirts in his warehouse, ready for business.
On 6 February 2020, due to upcoming CNY, he managed to sell off 700 T-shirts and he has decided to order more from the supplier. This time, he ordered another 800 T-shirts but the cost price has risen to $4.50 per unit. Tom’s Wear managed to sell all of his T-shirts by the end of June 2020. He’s not going to re-order for the time being.
All the while, Tom’s Wear is selling the T-shirts at $10 per piece.
Calculate:
-
How the inventory cost is calculated for each sale
-
Calculate how much are the sales revenue and profit earned by the sales of T-shirts in 2020
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