2293 Chapter 7 Assign Solution 292[1]

# 2293 Chapter 7 Assign Solution 292[1] - 2293 Chapter 7...

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2293 Chapter 7 Assign Solution 292 7-20 a) 1. FIFO Sale # 1 = 120 units Cost of Goods sold = (45 x \$8) + (75 x \$9) = \$1,035 Sale # 2 = 130 units Cost of Goods sold = (75 x \$9) + (55 x \$10) = \$1225 Total Cost of Goods Sold = \$1,035 + \$1,225 = \$2,260 Gross profit = (120 x \$16) + (130 x \$17) - \$2,260 = \$1,870 2. Weighted Average Sale # 1 = 120 units Cost of Goods sold = Total Cost/Total Units available x units sold = \$2,360/260 x 120 units = \$1,089.23 Note: As of the first sale, only the beginning balance and the first two purchases are in inventory. Average cost therefore is calculated at this point. Sale # 2 = 130 units Cost of Goods sold = Total Cost/Total Units available x units sold = \$1,870.77/190 x 130 units = \$1,280 Note: After the first sale, there are 140 units left in inventory at a total cost of \$1,270.77. The next purchase is added to this and the weighted average is recalculated. Total Cost of Goods Sold = \$1,089.23 + \$1,280 = \$2,369.23 Gross profit = (120 x \$16) + (130 x \$17) - \$2,369.23 = \$1,760.77 OR Using the Perpetual Tables

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Date Purchases COGS Ending Inventory Units Unit Cost Total Units Unit Cost Total Units Unit Cost Total Jan 1, 08 45 8 360 45
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2293 Chapter 7 Assign Solution 292[1] - 2293 Chapter 7...

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