PE 7-1A Cost flow methods
Three identical units of Item K113 are purchased during July, as shown below.
|
Item JC07 |
Units |
Cost |
|||
|
July |
9 |
Purchase |
1 |
$160 |
|
|
17 |
Purchase |
1 |
168 |
||
|
26 |
Purchase |
1 |
176 |
||
|
Total |
3 |
$504 |
|||
|
Average cost per unit |
$168 |
($504 ÷ 3 units) |
|||
Assume that one unit is sold on July 31 for $225.
Determine the gross profit for July and ending inventory on July 31 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) average cost methods.