Refer to the information in Exercise 6-7 and assume the periodic inventory system is used. Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Then (c) compute the gross margin for each method DateActivitiesUnits Acquired at CostUnits Sold at RetailJan. 1200 units e $10 = $ 2.000Beginning inventorySales...14.Jan. 10150 units @ $40Mar 14Purchase350 units a $15 =5,250Mar. 15Sales..300 units e $40July 30Purchase450 units a $20 =9,000Oc. 5Sales...-430 units a $40Oct. 26Purchase100 units a $25% =2,500%3DTotals1,100 units$18,750880 unitsCS Scanned with CamScanner

Introduction: FIFO: FIFO stands for First in First out Which is used in valuating inventory.

Refer to the information in Exercise 6-7 and assume the periodic inventory system is used. Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Then (c) compute the gross margin for each method

Refer to the information in Exercise 6-7 and assume the periodic inventory system is used. Determine the costs assigned to ending inventory and to cost of goods sold using (a) FIFO and (b) LIFO. Then (c) compute the gross margin for each method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Date
Activities
Units Acquired at Cost
Units Sold at Retail
Jan. 1
200 units e $10 = $ 2.000
Beginning inventory
Sales...
14.
Jan. 10
150 units @ $40
Mar 14
Purchase
350 units a $15 =
5,250
Mar. 15
Sales..
300 units e $40
July 30
Purchase
450 units a $20 =
9,000
Oc. 5
Sales...-
430 units a $40
Oct. 26
Purchase
100 units a $25% =
2,500
%3D
Totals
1,100 units
$18,750
880 units
CS Scanned with CamScanner

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