You have the following information for Oriole Company for the month ended October 31, 2022. Oriole uses a periodic method for inventory
Date Description Units Unit Cost or Selling Price
Oct. 1 Beginning inventory 55 26
Oct. 9 Purchase 130 28
Oct. 11 Sale 95 45
Oct. 17 Purchase 95 29
Oct. 22 Sale 55 50
Oct. 25 Purchase 65 31
Oct. 29 Sale 105 50
a. Calculate the weighted average cost.
(Round answer to 3 decimal places, e.g. 5.125.)
b. Calculate ending inventory, cost of goods sold, gross profit under each of the following methods.
(1) LIFO.
(2) FIFO.
(3) Average-cost.
(Round answers to o decimal place, e.g. 125.)
c. Calculate gross profit rate under each of the following methods.
(1) LIFO.
(2) FIFO.
(3) Average-cost.
(Round answers to 1 decimal place, e.g. 51.2%)

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jepessoa jepessoa · Answer 1 · 2021-03-13T01:34:20+01:00

Answer:

Oct. 1 Beginning inventory 55 26 = $1,430

Oct. 9 Purchase 130 28 = $3,640

Oct. 17 Purchase 95 29 = $2,755

Oct. 25 Purchase 65 31 = $2,015

totals 345 units, $28.522 per unit, $9,840

a) $28.522 per unit

b) FIFO

COGS = (55 x $26) + (130 x $28) + (70 x $29) = $7,100

Ending inventory = $2,740

Gross profit = (95 x $45) + (55 x $50) + (105 x $50) - $7,100 = $5,175

LIFO

COGS = (65 x $31) + (95 x $29) + (95 x $28) = $7,430

Ending inventory = $2,410

Gross profit = (95 x $45) + (55 x $50) + (105 x $50) - $7,430 = $4,845

Average cost

COGS = 255 x $28.522 = $7,273

Ending inventory = $2,567

Gross profit = $5,002

c) gross profit margin

FIFO = $7,100 / $12,275 = 57.8%

LIFO = $7,430 / $12,275 = 60.5%

Average = $7,273 / $12,275 = 59.3%