Inventory Calculations—LIFO and FIFO
The Marci Manufacturing Co. was organized in 2006 to produce a single product. The company’s production and sales records for the period 2006–2008 are summarized below:
|
|
Units Produced |
Sales |
||
|
|
No of Units |
Production Costs |
No of Units |
Sales Revenue |
|
2006 |
330,000 |
$198,000 |
250,000 |
$200,000 |
|
2007 |
310,000 |
201,500 |
300,000 |
255,000 |
|
2008 |
290,000 |
179,800 |
270,000 |
210,000 |
All units produced in a given year are assigned the same average cost.
Instructions: Calculate the gross profit for each of the three years assuming that inventory values are calculated in terms of:
1. LIFO
2. FIFO