Cost Flow Methods
The following three identical units of Item BZ1810 are purchased during November:
| |
|
Item BZ1810 |
Units |
Cost |
| Nov. |
2 |
Purchase |
1 |
$55 |
| |
14 |
Purchase |
1 |
57 |
| |
28 |
Purchase |
1 |
62 |
| |
Total |
|
3 |
$174 |
| |
Average cost per unit |
|
$58 ($174 ÷ 3 units) |
Assume that one unit is sold on November 30 for $90.
Determine the gross profit for November and ending inventory on November 30 using the
(a) first-in, first-out (FIFO);
(b) last-in, first-out (LIFO); and
(c) weighted average cost methods.
| |
Gross Profit |
Ending Inventory |
| a. First-in, first-out (FIFO) |
$ |
$ |
| b. Last-in, first-out (LIFO) |
$ |
$ |
| c. Weighted average cost |
$ |
$ |