E s Diamond Shop is computing its inventory and cost of goods sold for November 2003. At the beginning of the month, these items were in stock:
|
Quantity |
Cost |
Total |
|
|
Ring A |
8 |
600 |
$4,800 |
|
Ring A |
10 |
$650 |
$6,500 |
|
Ring B |
5 |
300 |
1,500 |
|
Ring B |
6 |
$350 |
$2,100 |
|
Ring B |
3 |
450 |
1,350 |
|
Ring C |
7 |
200 |
1,400 |
|
Ring C |
8 |
250 |
22 Jun 05 |
|
19,650 |
During the month, the shop purchased four type A rings at $600, two type B rings at $450, and five type C rings at $300 and made the following sales:
|
Ring Type |
Quantity Sold |
Price |
Cost |
|
A |
2 |
$1,000 |
$600.00 |
|
A |
3 |
1,050 |
600 |
|
A |
1 |
1,200. |
650 |
|
B |
2 |
850 |
450 |
|
B |
2 |
800 |
350 |
|
C |
4 |
450 |
200 |
|
C |
3 |
500 |
250 |
|
C |
1 |
550 |
250 |
Because of the high cost per item, E s uses specific identification inventory costing.
1. Calculate the cost of goods sold and ending inventory balances for November.
2. Calculate the gross margin for the month.