question archive Hoover Company purchased two identical inventory items

Hoover Company purchased two identical inventory items

Subject:FinancePrice:3.87 Bought7

Hoover Company purchased two identical inventory items. The item purchased first cost $33.00. The item purchased second cost $35.00. Then Hoover sold one of the inventory items for $62.00. Based on this information, the amount of:

  1. ending inventory is $35.00 if Hoover uses the LIFO cost flow method.
  2. gross margin is $28.00 if Hoover uses the weighted average cost flow method.
  3. cost of goods sold is $35.00 if Hoover uses the FIFO cost flow method.
  4. cost of goods sold is $33.00 if Hoover uses the LIFO cost flow method.

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Answer:

B )

Step-by-Step explanation

Weighted average cost per unit= Total cost of goods available for sale/ Total units available for sale

= ($33 + $35)/2

=$34

Gross margin per unit sold = selling price per unit - Weighted average cost per unit

=$62 - $34

=$28