Weighted Average Cost Method and Gross Profit Ratio
Martin Corp. began the year with 2,000 units of inventory that had been purchased for $6 per unit. During the year, 5,000 units were purchased for $8 each and 8,000 units for $10 each. Martin sold 9,000 units during the year for $15 each. The company uses the weighted average cost method.
Required:
1. Compute cost of goods sold expense. In your calculations round weighted average cost to the nearest cent.
2. Compute the gross profit ratio. If required, round your answer to one decimal place.