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Unformatted text preview: $159,000 Less: Ending inventory (below) (65,471 ) Cost of goods sold $ 93,529 * Cost of ending inventory: $159,000 Weighted-average unit cost = = $4.6765 34,000 units 14,000 units x $4.6765 = $65,471 * Alternatively, could be determined by multiplying the units sold by the average cost: 20,000 units x $4.6765 = $93,530 (rounding) Gross Profit ratio: FIFO: $51,000* u $140,000** = 36% LIFO: $41,500 u $140,000 = 30% Average: $46,471 u $140,000 = 33% *Sales less cost of goods sold **20,000 units x $7 sales price = sales Requirement 2 In situations when costs are rising, LIFO results in a higher cost of goods sold and, therefore, a lower gross profit ratio than FIFO....
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This note was uploaded on 11/16/2009 for the course ACCOUNTING 3351 taught by Professor Malkie during the Spring '09 term at ITT Tech Flint.
- Spring '09
- Financial Accounting