question archive The inventory records for Radford Co
The inventory records for Radford Co
Subject:AccountingPrice:3.87 Bought7
The inventory records for Radford Co. reflected the following
Beginning inventory @ May 1
100
units @
$ 4.00
First purchase @ May 7
300
units @
$ 4.40
second purchase @ May 17
500
units @
$ 4.60
Third purchase @ May 23
100
units @
$ 4.80
Sales @ May 31
900
units @
$ 7.80
Determine the amount of gross margin assuming the weighted average cost flow method. A) $3,015
B) $2,412
C) $1,314
D) $2,970
The inventory records for Radford Co. reflected the following
|
Beginning inventory @ May 1 |
100 |
units @ |
$ 4.00 |
|
First purchase @ May 7 |
300 |
units @ |
$ 4.40 |
|
second purchase @ May 17 |
500 |
units @ |
$ 4.60 |
|
Third purchase @ May 23 |
100 |
units @ |
$ 4.80 |
|
Sales @ May 31 |
900 |
units @ |
$ 7.80 |
Determine the amount of gross margin assuming the weighted average cost flow method. A) $3,015
B) $2,412
C) $1,314
D) $2,970
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Answer
- D) $ 2970
Step-by-Step explanation
Weighted Average cost per unit = Cost of Goods Available for sale/Unit Available for sale
Weighted Average cost per unit = (100*4+300*4.4+500*4.6+100*4.8)/(100+300+500+100)
Weighted Average cost per unit = 4.5
Gross Margin = Sale-Cost of good sold
Gross Margin = 900*7.8 - 900*4.5
Gross Margin = 2970
