Required information Exercise 519 Effect of inventory cost f

Required information Exercise 5-19 Effect of inventory cost flow (FIFO, LIFO, and weighted average) on gross margin LO 5-6 [The following information applies to the questions displayed below] The following information pertains to Mason Company for 2018: Beginning inventory Units purchased 140 units $60 430 units $62 Ending inventory consisted of 60 units. Mason sold 510 units at $124 each. All purchases and sales were made with cash. Operating expenses amounted to $3700. Exercise 5-19 Part a Required a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round \"Cost per unit\" to 2 decimal places and final answers to nearest whole dollar amount.) Weighted Average FIFO LIFO Gross margin

Solution

Sales = 510*124= $63240 a FIFO: Cost of goods sold 31340 =(140*60)+(370*62) Gross margin 31900 =63240-31340 b LIFO: Cost of goods sold 31460 =(430*62)+(80*60) Gross margin 31780 =63240-31460 c LIFO: Average cost=((140*60)+(430*62))/(140+430)= $61.51 Cost of goods sold 31370 =510*61.51 Gross margin 31870 =63240-31370